Close
Bellatrix Exploration Ltd.
  • Stock Quote
BXE
TMX

True Energy reports year-end reserves, net asset value and land holdings


View All News Releases February 20, 2007

    TSX: TUI.UN

    CALGARY, Feb. 20 /CNW/ - True Energy Trust ("True" or the "Trust") is
pleased to announce the results of its 2006 year-end reserves as evaluated by
GLJ Petroleum Consultants Ltd. ("GLJ"), the independent reserves evaluator for
100% of True's oil and gas properties in accordance with National Instrument
51-101 ("NI 51-101").
    As True plans to announce its audited 2006 financial results on March 2,
2007, certain financial estimates have been made by True in this release to
facilitate the discussion with respect to the performance of our capital
program. Readers are advised that these financial estimates are subject to
audit and may be amended as necessary.

    HIGHLIGHTS

    True is pleased to report the following highlights of the reserve report
and undeveloped land, in comparison to the prior year end, including:-   Increase in total proved reserves of 68%

    -   Increase in proved producing reserves of 69%

    -   Increase in proved and probable reserves of 61%

    -   Finding and development costs excluding acquisitions of $17.30/boe

    -   Finding and development costs of $27.00/boe for acquisitions net of
        dispositions

    -   Increased undeveloped land holdings by 111% to 731,000 net acresRESERVES

    Corporate reserves, at December 31, 2006, as evaluated by GLJ, are
summarized below and in the following tables. The Trust believes, as its
assets continue to mature, as steam assisted gravity drainage ("SAGD") at
Kerrobert is further implemented and as the tight gas in west central Alberta
begins to demonstrate harmonic decline behaviour, that positive revisions to
the reserve base could occur.
    2006 capital expenditures excluding acquisitions are estimated to be
$99.2 million; an additional $481 million of acquisitions (net of minor
dispositions) were incurred during the year, most notably the Prairie Schooner
Petroleum Ltd. and the Shellbridge Oil and Gas, Inc. corporate acquisitions.
    At December 31, 2006 the Trust's proved and probable working interest
reserves, using forecast prices and costs, were 48,665 mboe, an increase of
61% compared to 30,214 mboe at December 31, 2005. By commodity type, natural
gas makes up 62%, heavy oil 27%, and light oil and natural gas liquids 11%.
    True's average production for 2006 is estimated to be 13,861 boe/d,
weighted 62% toward natural gas, 26% toward heavy oil with the 12% balance
being light oil and natural gas liquids. On this basis, proved and probable
working interest reserve additions in 2006 replaced production by
approximately 4.6 times.
    At December 31, 2006, True's total proved working interest reserves were
31,085 mboe, an increase of 68% compared to 18,502 mboe at December 31, 2005.
Proved producing reserves grew 69% to 24,368 mboe over the year.Summary of Oil and Gas Working Interest Reserves(1)
    Forecast Prices and Costs
    -------------------------------------------------------------------------
                                                                       As at
                                                                     Dec. 31,
                                   As At December 31, 2006              2005

                                            Light
                                              and  Natural
                        Natural    Heavy   Medium      Gas    Total    Total
                            Gas      Oil      Oil  Liquids    (mboe,   (mboe,
                          (mmcf)   (mbbl)   (mbbl)   (mbbl)     6:1)     6:1)
    -------------------------------------------------------------------------
    Proved
      Developed
       producing        102,660    4,282    1,601    1,375   24,368   14,438
      Developed
       non-producing      7,972       19       77      127    1,551    2,085
      Undeveloped         5,405    3,914      284       66    5,166    1,979
                       ------------------------------------------------------
    Total proved        116,038    8,214    1,963    1,568   31,085   18,502
    Probable             64,632    4,805    1,063      940   17,580   11,712
                       ------------------------------------------------------
    Proved plus
     probable,
     producing          135,718    5,469    2,096    1,810   31,995   19,418
                       ------------------------------------------------------
    Total proved plus
     probable           180,670   13,019    3,026    2,508   48,665   30,214
    -------------------------------------------------------------------------
    (1) may not add due to rounding



    Summary of Oil and Gas Net Interest Reserves(1)
    Forecast Prices and Costs
    -------------------------------------------------------------------------
                                                                       As at
                                                                     Dec. 31,
                                    As At December 31, 2006             2005

                                            Light
                                              and  Natural
                        Natural    Heavy   Medium      Gas    Total    Total
                            Gas      Oil      Oil  Liquids    (mboe,   (mboe,
                          (mmcf)   (mbbl)   (mbbl)   (mbbl)     6:1)     6:1)
    -------------------------------------------------------------------------
    Proved
      Developed
       producing         82,648    3,621    1,493      907   19,796   11,796
      Developed
       non-producing      6,202       16       68       85    1,204    1,625
      Undeveloped         4,474    3,239      250       45    4,280    1,637
                       ------------------------------------------------------
    Total proved         93,324    6,876    1,812    1,037   25,279   15,058
    Probable             51,761    4,073      959      614   14,273    9,466
                       ------------------------------------------------------
    Proved plus
     probable,
     producing          109,576    4,615    1,951    1,191   26,020   15,909
                       ------------------------------------------------------
    Total proved plus
     probable           145,085   10,949    2,771    1,652   39,552   24,523
    -------------------------------------------------------------------------
    (1) may not add due to rounding



    Summary of Oil and Gas Working Interest Reserves(1)
    Constant Prices and Costs
    -------------------------------------------------------------------------
                                                                       As at
                                                                     Dec. 31,
                                    As At December 31, 2006             2005

                                            Light
                                              and  Natural
                        Natural    Heavy   Medium      Gas    Total    Total
                            Gas      Oil      Oil  Liquids    (mboe,   (mboe,
                          (mmcf)   (mbbl)   (mbbl)   (mbbl)     6:1)     6:1)
    -------------------------------------------------------------------------
    Proved
      Developed
       producing        101,259    4,312    1,694    1,361   24,243   14,735
      Developed
       non-producing      7,954       20       77      127    1,550    2,084
      Undeveloped         5,396    3,914      287       65    5,166    1,989
                       ------------------------------------------------------
    Total proved        114,609    8,246    2,057    1,554   30,959   18,808
    Probable             62,882    4,834    1,077      926   17,318   11,943
                       ------------------------------------------------------
    Total proved plus
     probable           177,490   13,080    3,135    2,481   48,277   30,751
    -------------------------------------------------------------------------
    (1) may not add due to rounding



    Summary of Oil and Gas Net Interest Reserves(1)
    Constant Prices and Costs
    -------------------------------------------------------------------------
                                                                       As at
                                                                     Dec. 31,
                                    As At December 31, 2006             2005

                                            Light
                                              and  Natural
                        Natural    Heavy   Medium      Gas    Total    Total
                            Gas      Oil      Oil  Liquids    (mboe,   (mboe,
                          (mmcf)   (mbbl)   (mbbl)   (mbbl)     6:1)     6:1)
    -------------------------------------------------------------------------
    Proved
      Developed
       producing         81,480    3,655    1,584      897   19,716   12,078
      Developed
       non-producing      6,192       17       68       86    1,203    1,626
      Undeveloped         4,464    3,240      252       44    4,280    1,650
                       ------------------------------------------------------
    Total proved         92,136    6,912    1,904    1,027   25,200   15,354
    Probable             50,272    4,107      972      605   14,063    9,670
                       ------------------------------------------------------
    Total proved plus
     probable           142,408   11,019    2,877    1,632   39,263   25,023
    -------------------------------------------------------------------------
    (1) may not add due to rounding



    FINDING, DEVELOPMENT AND ACQUISITION COSTS(1) - PROVED PLUS PROBABLE

    -------------------------------------------------------------------------
                                                                        2004-
                                             2006     2005     2004     2006
    -------------------------------------------------------------------------
    Excluding Future Development Costs
    FD&A Costs Proved plus
     Probable ($/boe)
      Exploration and development           17.30    20.60     5.60    14.50
      Acquisitions (net of dispositions)    27.00    32.30    23.70    27.70
                                         ------------------------------------
      Total                                 24.60    29.00     6.40    20.00
                                         ------------------------------------
    Including Future Development Costs(2)
    FD&A costs - Proved plus
     Probable ($/boe)
      Exploration and development           26.80    30.00     7.20    21.30
      Acquisitions (net of dispositions)    27.00    32.30    23.70    27.70
                                         ------------------------------------
      Total                                 26.90    31.70     7.90    22.20
    -------------------------------------------------------------------------

    (1) NI 51-101 specifies how finding and development costs should be
        calculated if they are reported. Essentially NI 51-101 requires that
        the exploration and development costs incurred in the year along with
        the change in estimated future development costs be aggregated and
        then divided by the applicable reserve additions. The calculation
        specifically excludes the effects of acquisitions and dispositions on
        both reserves and costs. By excluding the effects of acquisitions and
        dispositions True believes that the provisions of the NI 51-101 do
        not fully reflect True's ongoing reserve replacement costs. Since
        acquisitions can have a significant impact on True's annual reserve
        replacement costs, excluding these amounts could result in an
        inaccurate portrayal of True's cost structure. Accordingly, True also
        provides finding, development and acquisition costs that incorporate
        all acquisitions net of any dispositions during the year. The
        foregoing calculation is based on working interest reserves.

    (2) The aggregate of the exploration and development costs incurred in
        the most recent financial year and the change during that year in
        estimated future development costs generally will not reflect total
        finding and development costs related to reserve additions for that
        year.



    FINDING, DEVELOPMENT AND ACQUISITION COSTS(1) - PROVED
    -------------------------------------------------------------------------
                                                                        2004-
                                             2006     2005     2004     2006
    -------------------------------------------------------------------------
    Excluding Future Development Costs
    FD&A Costs Proved ($/boe)
      Exploration and development           20.70    31.90     7.60    20.10
      Acquisitions (net of dispositions)    37.30    53.90    30.40    40.50
                                         ------------------------------------
      Total                                 32.80    47.20     8.60    29.50
                                         ------------------------------------
    Including Future Development Costs(2)
    FD&A costs - Proved ($/boe)
      Exploration and development           25.90    39.20     9.20    24.80
      Acquisitions (net of dispositions)    37.30    53.90    30.40    40.50
                                         ------------------------------------
      Total                                 34.20    49.50    10.10    31.30
    -------------------------------------------------------------------------
    (1) NI 51-101 specifies how finding and development costs should be
        calculated if they are reported. Essentially NI 51-101 requires that
        the exploration and development costs incurred in the year along with
        the change in estimated future development costs be aggregated and
        then divided by the applicable reserve additions. The calculation
        specifically excludes the effects of acquisitions and dispositions on
        both reserves and costs. By excluding the effects of acquisitions and
        dispositions True believes that the provisions of the NI 51-101 do
        not fully reflect True's ongoing reserve replacement costs. Since
        acquisitions can have a significant impact on True's annual reserve
        replacement costs, excluding these amounts could result in an
        inaccurate portrayal of True's cost structure. Accordingly, True also
        provides finding, development and acquisition costs that incorporate
        all acquisitions net of any dispositions during the year. The
        foregoing calculation is based on working interest reserves.

    (2) The aggregate of the exploration and development costs incurred in
        the most recent financial year and the change during that year in
        estimated future development costs generally will not reflect total
        finding and development costs related to reserve additions for that
        year.NET PRESENT VALUE OF FUTURE NET REVENUE

    The forecast prices used in the reserve report effective December 31,
2006 were an average of Forecast Prices published by GLJ, Sproule Associates
Limited ("Sproule") and McDaniel & Associates Consultants Ltd. ("McDaniel") as
at January 1, 2007. In the reserve report effective December 31, 2005, the
forecast prices used were the average of the same firms' published Forecast
Prices and Costs as at January 1, 2006. The increase in net present value of
future net revenue is primarily the result of increased volumes from
acquisitions and development.
    The estimated future net revenues are stated before deducting future
estimated site restoration costs but reduced for estimated future abandonment
costs, the Saskatchewan Capital Tax and estimated capital for future
development associated with the reserves. In the reserve report, the net total
future capital associated with the proved reserves is $62.98 million and with
the total proved plus probable reserves is $126.6 million over the life of the
reserves.Summary of Net Present Values of Future Net Revenue(1)
    Forecast Prices and Costs ($000s)
    Before Income Taxes(2), Discounted at (%/year)
    -------------------------------------------------------------------------
                                                                       As at
                                                                 December 31,
                                 As at December 31, 2006                2005
                              0%       5%       8%      10%       0%      10%
    -------------------------------------------------------------------------
    Proved
      Developed
       producing        592,195  484,202  440,488  416,660  382,532  295,516
      Developed
       non-producing     38,992   30,028   26,927   25,295   60,885   38,432
      Undeveloped        56,112   43,060   36,957   33,430   32,120   19,637
                     --------------------------------------------------------
    Total proved        687,300  557,290  504,373  475,385  475,537  353,585
    Probable            393,616  266,522  221,509  198,511  285,331  149,216
                     --------------------------------------------------------
    Proved Plus
     Probable
     Producing          799,270  616,072  547,914  512,138  511,603  363,017
                     --------------------------------------------------------
    Total proved
     plus probable    1,080,917  823,813  725,882  673,895  760,869  502,800
    -------------------------------------------------------------------------
    (1) May not add due to rounding;
    (2) The Trust is entitled to deduct from its income all amounts which are
        paid or payable to its unitholders in a given financial year. As the
        Trust distributes all its taxable income to its unitholders net
        present values of the future net revenues have not been included on
        an after-tax basis. The foregoing does not take into account by the
        Federal Government proposal to apply a tax at the trust level on
        distributions of certain income from publicly traded mutual fund
        trusts.



    Summary of Net Present Values of Future Net Revenue(1)
    Constant Prices and Costs ($000s)
    Before Income Taxes(2), Discounted at (%/year)
    -------------------------------------------------------------------------
                                                                       As at
                                                                 December 31,
                                 As at December 31, 2006                2005
                              0%       5%       8%      10%       0%      10%
    -------------------------------------------------------------------------
    Proved
      Developed
       producing        453,943  381,174  350,053  332,703  441,841  319,598
      Developed
       non-producing     27,236   21,557   19,401   18,237   70,872   43,438
      Undeveloped        44,687   33,534   28,267   25,211   39,244   22,221
                     --------------------------------------------------------
    Total proved        525,866  436,265  397,722  376,151  551,957  385,257
    Probable            281,629  197,978  166,250  149,592  350,687  175,659
                     --------------------------------------------------------
    Total proved plus
     probable           807,494  634,243  563,972  525,743  902,645  560,916
    -------------------------------------------------------------------------
    (1) May not add due to rounding;
    (2) The Trust is entitled to deduct from its income all amounts which are
        paid or payable to its unitholders in a given financial year. As the
        Trust distributes all its taxable income to its unitholders net
        present values of the future net revenues have not been included on
        an after-tax basis. The foregoing does not take into account by the
        Federal Government proposal to apply a tax at the trust level on
        distributions of certain income from publicly traded mutual fund
        trusts.NET ASSET VALUE

    The following table of net asset value is based on the GLJ evaluation of
future net revenue, which does not represent fair market value and does not
take into account possible reserve additions from reinvestment of cash flow in
existing properties.Net Asset Value
    Proved plus Probable
    ($000's except acre, unit and per unit amounts)
    -------------------------------------------------------------------------
                                    PW 0%       PW 5%       PW 8%      PW 10%
    -------------------------------------------------------------------------
    Reserves Report(1)         1,080,917     823,813     725,882     673,895
    Land(2)
      731,000 Net acres
      $ 161 / acre               117,691     117,691     117,691     117,691
    Debt(3)
      Net total incl. debenture  273,600     273,600     273,600     273,600
                              -----------------------------------------------
    Net asset value              925,008     667,904     569,973     517,986
                              -----------------------------------------------
    No. units 70.276 million
    $ / unit                       13.16        9.50        8.11        7.37
    Fully diluted with
     exchangeables                 13.11        9.46        8.07        7.34
    -------------------------------------------------------------------------
    (1) As evaluated by GLJ as at December 31, 2006 based on forecast prices
        and costs
    (2) As estimated by True as at December 31, 2006 on 731,000 net acres of
        undeveloped land. Based on recent sales in the area or in similar
        properties in the same general areas.
    (3) Long term debt net of working capital as at December 31, 2006,
        including debt portion of convertible debentures.RESERVE LIFE INDEX

    The Trust's reserve life index has been determined for proved plus
probable working interest reserves using forecast prices and costs. The
reserve life index is calculated by dividing reserves as at the effective date
of the GLJ report, December 31, 2006, by the production as set forth in the
table below, representing a measure of the amount of time production could be
sustained at the production rates based on the reserves at the applicable
point in time.Reserve Life Index
        ---------------------------------------------------------------------
                                                                2006
                                                                      Proved
                                                                        plus
                                                          Proved    probable
        ---------------------------------------------------------------------
        Twelve month average production ending
         December 31, 2006                                   6.1         9.6
        Fourth quarter 2006 production, annualized           4.3         6.8
        ---------------------------------------------------------------------METHOD OF PREPARATION

    In this press release both "Working Interest" reserves (being working
interest reserves, excluding royalty interest reserves, before deduction of
royalty burdens payable) and "Net Interest" reserves (being working interest
reserves and royalty interests less royalty burdens payable) are disclosed.
The reserve reports were prepared utilizing definitions as set out under
National Instrument 51-101.

    LAND

    As at December 31, 2006, True had over 730,000 net undeveloped acres in
Alberta, British Columbia and Saskatchewan.Land Statistics
    -------------------------------------------------------------------------
                                                            2006        2005
    -------------------------------------------------------------------------
    Average working interest
      Developed                                               60%         49%
      Undeveloped                                             67%         63%
    -------------------------------------------------------------------------
    Total                                                     64%         57%
    -------------------------------------------------------------------------



    Land Holdings(1)
    -------------------------------------------------------------------------
                                           2006                    2005
                                   Gross         Net       Gross         Net
    -------------------------------------------------------------------------
    Developed
      British Columbia            45,727      22,109      16,799       4,641
      Alberta                    524,159     292,909     290,992     121,886
      Saskatchewan               131,635     107,451     120,708      82,500
                               ----------------------------------------------
      Total                      701,522     422,469     428,499     209,027
                               ----------------------------------------------
    Undeveloped
      British Columbia           189,871      92,711      10,085       3,280
      Alberta                    690,450     456,579     354,292     186,846
      Saskatchewan               212,628     180,617     185,868     155,805
                               ----------------------------------------------
      Total                    1,092,949     730,906     550,245     345,930
                               ----------------------------------------------

      British Columbia           235,598     115,820      26,884       7,921
      Alberta                  1,214,610     749,488     645,284     308,732
      Saskatchewan               344,263     288,068     306,576     238,305
                               ----------------------------------------------
    Total                      1,794,471   1,153,375     978,744     554,957
    -------------------------------------------------------------------------
    (1) May not add due to roundingTrue Energy Trust is a Calgary-based oil and natural gas trust. The
Trust's units trade on the Toronto Stock Exchange under the symbol TUI.UN.

    READER ADVISORY: BOEs may be misleading, particularly if used in
isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.

    Statements in this document may contain forward-looking information
including management's assessment of future plans and operations, reserve
estimates, capital expenditures and the timing thereof and the total future
capital required to bring undeveloped proved and probable reserves onto
production. The reader is cautioned that assumptions used in the preparation
of such information may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted, a result of
numerous known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of the Trust. The reader is cautioned not to
place undue reliance on this forward looking information. These risks include,
but are not limited to: the risks associated with the oil and gas industry;
commodity prices, and; exchange rate changes. Industry related risks could
include, but are not limited to: operational risks in exploration; development
and production; delays or changes in plans; risks associated to the
uncertainty of reserve estimates; health and safety risks, and; the
uncertainty of estimates and projections of production, costs and expenses.
Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could effect the
Trust's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com), at the Trust's website
(www.trueenergytrust.com). Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and the Trust does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required by
applicable securities laws.
    The reader is further cautioned that the preparation of financial
statements in accordance with Generally Accepted Accounting Principles
("GAAP") requires management to make certain judgements and estimates that
affect the reported amounts of assets, liabilities, revenues and expenses.
Estimating reserves is also critical to several accounting estimates and
requires judgments and decisions based upon available geological, geophysical,
engineering and economic data. These estimates may change, having either a
negative or positive effect on net earnings as further information becomes
available, and as the economic environment changes.
    The reader is also cautioned that this document contains the term reserve
life index, which is not a recognized measure under GAAP. Management believes
that this measure is a useful supplemental measure of the length of time the
reserves would be produced over at the rate used in the calculation. Readers
are cautioned, however, that this measure should not be construed as an
alternative to other terms such as net income determined in accordance with
GAAP as a measure of performance. True's method of calculating this measure
may differ from other companies or trusts, and accordingly, they may not be
comparable to measures used by other entities.

    %SEDAR: 00021401E



Bellatrix Exploration Ltd.
1920, 800 5th Avenue SW
Calgary, Alberta T2P 3T6
Main: 403-266-8670
Fax: 403-264-8163
Twitter Facebook LinkedIn
Bellatrix Exploration
Investor Relations
investor.relations@bxe.com
Emergency Contact
1-403-266-8670