Leucrotta Exploration Inc. ("Leucrotta" or the "Company") (TSX VENTURE:LXE) is pleased to announce its 2016 year-end reserves as independently evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") effective December 31, 2016 (the "GLJ Report"), in accordance with National Instrument 51-101 ("NI 51-101") and Canadian Oil and Gas Evaluation (COGE) Handbook. All dollar figures are Canadian dollars unless otherwise noted.
Leucrotta continued its plan of spending capital on wide area delineation of the Lower Montney Turbidite in the Doe/Mica area where it has accumulated 141 net sections of Montney land. Leucrotta has maintained a conservative philosophy to booking reserves and has only booked locations immediately offsetting previously drilled wells but covering a large geographic area. A total of 2 new wells and 6 new locations were booked in the Doe East and Mica areas in 2016 while leaving the Doe bookings static from 2015 to 2016. For additional information on reserves assigned to these drilling locations please see "Forward Looking Information - Potential Drilling Locations" at the end of this news release. Leucrotta also has the current financial capability (assuming pricing and performance are comparable to the GLJ Report) to execute on the $96 million of FDC included in the GLJ Report and therefore realize on the values presented.
Leucrotta has estimated, based on mapping and other technical data, that it has up to 780 potential Montney drilling locations (predominantly in the Lower Montney Turbidite) of which 20 have been booked in the reserve report. For additional information on reserves assigned to these drilling locations please see "Forward Looking Information - Potential Drilling Locations" at the end of this news release. Should Leucrotta be able to obtain similar drilling results on future wells, there is a large potential value to be booked and subsequently realized on given Leucrotta's large unbooked drilling inventory.
Leucrotta's capital expenditures were focused predominantly in the Doe/Mica area to expand its land base, improve and expand infrastructure, and start to delineate its large Montney land base.
During 2016 the Company added Montney acreage adjacent to its Montney land base through both Crown land sales and private land acquisitions as well as began the pipeline system and infrastructure required to tie-in previously drilled wells to the Company's Doe gas plant. This pipeline and infrastructure spending continued into Q1 2017 and four previously drilled wells were subsequently tied-in and began producing. In the fourth quarter of 2016 the Company drilled three wells (3.0 net) resulting in two successful light oil wells in Mica (one completed in Q4 2016 and the other in Q1 2017) and one vertical test well.
Leucrotta continued to have positive results in its Montney delineation and development in the Dawson area of British Columbia.
A total of eight additional wells were booked this year in the Mica and East Doe areas and accounted for the majority of the reserve adds this year. Based on the GLJ Report, the additional wells accounted for an increase of 2.4 mmboes in the proved category and 6.0 mmboes in the proved plus probable category
Leucrotta has only booked reserves to a portion of 8 sections (5 net) of its total 141 net sections of Montney land in the greater Dawson area. The bookings leave a material amount of land for potential future bookings and provides for a manageable amount of FDC booked ($95.7 million on a proved plus probable basis) relative to Leucrotta's current financial capabilities.
Finding and Development Costs ("F&D") and Finding, Development and Acquisition Costs ("FD&A")
F&D costs exclude net property acquisitions/dispositions, undeveloped land acquisitions, and gas plant equipment which was not in use. F&D costs, including FDC, were $11.55 per boe on a proved basis and $7.00 on a proved plus probable basis.
FD&A costs, including FDC, were $13.05 per boe on a proved basis and $7.62 on a proved plus probable basis. The three-year comparative which normalizes the period costs was $31.59 on a proved basis and $11.27 on a proved plus probable basis.
FD&A costs were significantly affected by the large amount expended for land and gas plant equipment which was not in use during 2014 to 2016 with no direct reserve additions during these periods for these expenditures. Certain infrastructure costs were also incurred during the period that affects all future projects as well as current projects. Long-term FD&A will normalize both these cost areas but 2014 to 2016 were negatively affected.
For Leucrotta's full NI 51-101 disclosure related to its 2016 year-end reserves please refer to the Company's AIF available on SEDAR at www.sedar.com.
Leucrotta Exploration Inc. is a Montney focused producer with lands located in the Dawson-Sunrise area in Northeast British Columbia. Leucrotta’s current acreage in the area is approximately 123,500 gross (113,300 net) acres or approximately 193 gross (177 net) sections of Montney land. Current production is approximately 1,300 boepd. Leucrotta’s shares are listed on the TSX Venture exchange under the symbol LXE.
SOURCE: Leucrotta Exploration Inc.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.