Athabasca Oil Sands Corp. Announces Independent Reserves and Resources Report and Operations Update
CALGARY, June 24, 2011 /CNW/ --
CALGARY, June 24, 2011 /CNW/ - Athabasca Oil Sands Corp. (TSX: ATH) is
pleased to announce its reserves and contingent resources have
increased, the tests at Dover West are progressing and the board of
directors has approved an increase to the budget for, and an
acceleration of the appraisal and development program in, the Alberta
Deep Basin.
Bitumen Reserves and Contingent Resources Grow
Athabasca drilled 89 delineation wells at Hangingstone, Dover West,
Birch and Grosmont during the 2010-2011 winter programs and increased
its net resource volumes by approximately 10% to 9.672 billion barrels
of contingent resource (best estimate) and 289 million barrels of
probable reserves compared to the independent estimates at December 31,
2010. The third-party independent evaluation reports were prepared by
GLJ Petroleum Consultants Ltd. (GLJ) and DeGolyer and MacNaughton
Canada Limited (D&M) with effective dates of April 30, 2011.
Sveinung Svarte, president and CEO, says the increase in Athabasca's
resources is a reflection of both the successful drilling program and
the quality of its vast land base. 'I am very pleased to see that we
continue to add significant resources through organic growth. This
demonstrates the technical excellence and capability of the
organization as we move into the development stage of certain
projects.'
Based on the independent evaluation reports of GLJ and D&M and the
assumptions made therein, the estimated before tax net present value
(NPV) of future net revenue, discounted at 9.0%, of Athabasca's
contingent resources (best estimate) ($31.3 billion) and probable plus
possible reserves ($2.1 billion) is approximately $33.4 billion.
Summary details regarding Athabasca's bitumen reserve and contingent
resources and the associated NPV of future net revenues are included in
the attached Schedule 'A'.
The largest addition in resources was in the Birch area, northwest of
Fort McMurray, where the company saw an increase of approximately 64%
of contingent resource (best estimate). The resource figure for the
area is now 1.9 billion barrels contingent resource (best estimate),
which is believed to be sufficient to support a project with plateau
production of 155,000 barrels/day.
'We knew Birch was a promising area,' Svarte says. 'We are excited with
the results after one drilling season, especially knowing there are
large parts of the area which are relatively unexplored and which could
add further upside.'
Dover West Tests Progressing
Last winter, Athabasca started the testing of the bitumen bearing Leduc
carbonate reservoir in the Dover West area. The first test was based
on steam injection and successfully resulted in the addition of 140
million barrels of contingent resource (best estimate).
The company also completed the construction of a thermal assisted
gravity drainage (TAGD) heating field test pilot where two horizontal
wells are being heated using electrical cables as the heating source.
An area of the Leduc Reef has been heating for approximately 10 weeks
and four observation wells indicate that the heat is spreading, as the
company's modeling had predicted. Production results from the test are
expected as soon as the area can be accessed on winter roads.
Deep Basin Program
Athabasca is also actively involved in the Deep Basin area, in
northwestern Alberta, where it holds more than one million acres of
promising acreage for light oil and liquids-rich gas resource play. The
initial approved drilling program consisted of six wells. Of these,
four have been drilled and three have been completed using multi-stage
fracture stimulation, while the fourth well will be completed in the
upcoming weeks.
'Our board of directors recently approved an additional $61.5 million to
the 2011 capital expenditure budget for an expanded work program which
includes additional wells, 3D seismic and geological studies focusing
on the Montney, Nordegg and Duvernay formations,' Svarte says.
'Athabasca is planning to drill a total of 14 wells during 2011. The
acceleration and expansion of the program is based on the results from
the company's initial wells, further geological studies and drilling
results from offsetting operators.'
'The company expects to continue to expand the Deep Basin program,' adds
Bill Gallacher, chairman of the board, 'while keeping capital
expenditures at a disciplined level. The land position we hold in the
Deep Basin is also a tribute to the excellent work done by Athabasca's
geosciences team. They recognized the unique potential of this area and
acquired a large land position at reasonable prices.'
According to Gallacher, the production of light oil and liquids-rich gas
is very complementary to Athabasca's core bitumen business. 'High
quality geoscience, reservoir and drilling departments are fundamental
to the company's success in bitumen and light oil. The production of
light oil and liquids-rich gas are also excellent natural hedges for
diluents and gas needed in the oil sands business.'
Company Hires Development Employees
The company is pleased to announce the appointment of Richard Koshman to
the newly-created position of vice president, projects. He has
successfully delivered steam assisted gravity drainage (SAGD)
projects. Koshman will work with the asset teams on each oil sands
project, from the regulatory application through construction to
production.
Athabasca has filed three regulatory applications with the Energy
Resources Conservation Board (ERCB) for the MacKay River commercial
project (40% working interest), Dover commercial project (40% working
interest) and Hangingstone pilot (100% working interest). The company
intends to file two more regulatory applications in the Dover West
asset area during 2011 and expects to receive approval for the 150,000
barrels/day MacKay River project later this year. The detailed
engineering is on-going and the company is expected to be ready to
build these projects.
Athabasca continues to hire key employees with thorough SAGD
implementation experience from Canada's leading oil sands operators.
There are about 150 employees on staff today and that number is
expected to grow to approximately 200 by year-end.
Athabasca is a dynamic company poised to unlock bitumen from Canada's
vast oil sands region and light oil and liquids-rich gas from its Deep
Basin play in northern Alberta. It has excellent assets, a large
resource base with ample upside, talented people and is well financed.
It also has a diverse portfolio of short, mid and long-term assets.
Athabasca's common shares trade on the Toronto Stock Exchange (TSX)
under the symbol ATH. For more information visit: http://www.aosc.com.
Athabasca's Annual General Meeting
Date: Friday, June 24, 2011
Time: 10:00 a.m. MT (12:00 p.m. ET)
Venue: Strand Tivoli Room
The Metropolitan Centre
333 - 4(th) Avenue S.W., Calgary, Alberta
To view the live video-stream webcast or archived event, please visit:
http://event.on24.com/r.htm?e=321761&s=1&k=76A06C1A1D7CC4DB8925AF1BBE3E63A9
The webcast will be archived for approximately 365 days.
Reader Advisory
This News Release contains forward-looking information that involves
various risks, uncertainties and other factors. All statements other
than statements of historical fact are forward-looking statements. The
use of any of the words 'anticipate', 'plan', 'continue', 'estimate',
'expect', 'may', 'will', 'project', 'should', 'believe', 'predict',
'pursue' and 'potential' and similar expressions are intended to
identify forward-looking statements. The forward-looking information is
not historical fact, but rather is based on AOSC's current plans,
objectives, goals, strategies, estimates, assumptions and projections
about AOSC's industry, business and future financial results. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. No assurance
can be given that these expectations will prove to be correct and such
forward-looking statements included in this News Release should not be
unduly relied upon. These statements speak only as of the date of this
News Release. In particular, this News Release may contain
forward-looking statements pertaining to the following: AOSC's capital
expenditure programs; the estimated quantity of AOSC's Probable and
Possible Reserves and Contingent Resources; AOSC's drilling plans;
AOSC's plans for, and results of, exploration and development
activities; AOSC's estimated future commitments; proposed experimental
testing in the Dover West area and the results there from; business
plans; AOSC's plans with respect to the Hangingstone, Dover West, Birch
and Grosmont assets and the timing for receipt of any regulatory
applications or approvals. With respect to forward-looking statements
and forward-looking information contained in this News Release,
assumptions have been made regarding, among other things: AOSC's
ability to obtain qualified staff and equipment in a timely and
cost-efficient manner; the regulatory framework governing royalties,
taxes and environmental matters in the jurisdictions in which AOSC
conducts and will conduct its business; the applicability of
technologies for the recovery and production of AOSC's reserves and
resources; future capital expenditures to be made by AOSC; future
sources of funding for AOSC's capital programs; AOSC's future debt
levels; geological and engineering estimates in respect of AOSC's
reserves and resources; the geography of the areas in which AOSC is
conducting exploration and development activities; and AOSC's ability
to obtain financing on acceptable terms. Actual results could differ
materially from those anticipated in these forward-looking statements
as a result of the risk factors set forth above and in the Company's
Annual Information Form dated March 28, 2011, which is available on the
SEDAR website at www.sedar.com ('AIF'), including: fluctuations in market prices for crude oil,
natural gas and bitumen blend; general economic, market and business
conditions; variations in foreign exchange and interest rates; factors
affecting potential profitability; the global financial crisis;
uncertainties inherent in estimating quantities of reserves and
resources; AOSC's status and stage of development; uncertainties
inherent in Steam Assisted Gravity Drainage ('SAGD'), Cyclic Steam
Stimulation ('CSS'), Thermal Assisted Gravity Drainage ('TAGD') and
other bitumen recovery processes; the potential impact of the exercise
of the Put/Call Options (as defined in the AIF) on AOSC; failure to
meet development schedules and potential cost overruns; increases in
operating costs rendering projects uneconomic; the effect of diluent
and natural gas supply constraints and increases in the costs thereof;
gas over bitumen issues; environmental risks and hazards and the cost
of compliance with environmental regulations, including greenhouse gas
regulations and potential Canadian and U.S. climate change legislation;
failure to obtain or retain key personnel; the substantial capital
requirements of AOSC's projects; the need to obtain regulatory
approvals and maintain compliance with regulatory requirements; extent
of, and cost of compliance with, current and future government laws and
regulations; changes to royalty regimes; political risks; failure to
accurately estimate abandonment and reclamation costs; risks inherent
in AOSC's operations, including those related to exploration,
development and production of oil sands and other petroleum reserves
and resources, including the production of oil sands reserves and
resources using SAGD, CSS, TAGD or other in-situ technologies; the
potential for management estimates and assumptions to be inaccurate;
long term reliance on third parties and defaults by counter parties;
the potential lack of available drilling equipment and limitations on
access to AOSC's assets; aboriginal claims; seasonality; hedging risks;
risks associated with maintaining systems of internal controls;
insurance risks; claims made in respect of AOSC's operations,
properties or assets; competition risks arising from future acquisition
activities; volatility in the market price of the common shares. In
addition, information and statements in this News Release relating to
'reserves' and 'resources' are deemed to be forward-looking information
and statements, as they involve the implied assessment, based on
certain estimates and assumptions, that the reserves and resources
described exist in the quantities predicted or estimated, and that the
reserves and resources described can be profitably produced in the
future. The assumptions relating to AOSC's reserves and resources are
contained in the reports of GLJ Petroleum Consultants Ltd. dated
effective April 30, 2011 and DeGolyer and MacNaughton Canada Limited
dated effective April 30, 2011. The risks and uncertainties referred to
above are described in more detail in AOSC's AIF which is available on
the SEDAR website at www.sedar.com. See also AOSC's financial statements and Management's Discussion and
Analysis for the year ended December 31, 2010 and the most recently
completed financial quarter, which are also available on SEDAR. Readers
are cautioned that the foregoing list of risk factors should not be
construed as exhaustive. The forward-looking statements included in
this News Release are expressly qualified by this cautionary statement.
AOSC does not undertake any obligation to publicly update or revise any
forward-looking statements except as required by applicable securities
laws.
Schedule 'A'
Hangingstone Project, MacKay Phase 1 and Dover Phase 1 Reserves Based on
Forecast Prices and Costs((4)(5)(6) )
RESERVES SUMMARY
BITUMEN TOTAL OIL EQUIVALENT
Company Company Company Company
Gross((1)) Net((1)) Gross((1)) Net((1))
RESERVES CATEGORY (mbbl) (mbbl) (mbbl) (mbbl)
PROBABLE
Dover 137,144 105,570 137,144 105,570
MacKay 113,919 87,033 113,919 87,033
Hangingstone 37,805 29,928 37,805 29,928
TOTAL PROBABLE((2)) 288,868 222,531 288,868 222,531
POSSIBLE
Dover 18,275 12,476 18,275 12,476
MacKay 25,801 17,455 25,801 17,455
Hangingstone 2,673 1,865 2,673 1,865
TOTAL POSSIBLE((3)) 46,749 31,796 46,749 31,796
TOTAL PROBABLE PLUS
POSSIBLE((2)(3)) 335,617 254,327 335,617 254,327
Summary of Net Present Values of Future Net Revenue Based on Forecast
Prices and Costs((4)(5)(6) )
Before Income Tax Discounted at (%/year)
RESERVES 0% 5% 9% 10% 15% 20%
CATEGORY (MM$) (MM$) (MM$) (MM$) (MM$) (MM$)
PROBABLE
Dover 3,808 1,753 972 840 399 171
MacKay 3,325 1,510 841 729 352 152
Hangingstone 699 406 243 210 77 (12)
Other Tax Pools - - - - -
TOTAL PROBABLE((2)) 7,832 3,668 2,056 1,779 829 311
POSSIBLE
Dover 823 279 133 112 56 33
MacKay 1,249 363 155 128 57 33
Hangingstone 88 56 38 34 20 9
Other Tax Pools - - - - -
TOTAL POSSIBLE((3)) 2,160 698 326 274 133 75
TOTAL PROBABLE
PLUS
POSSIBLE((2)(3)(5)) 9,992 4,367 2,382 2,053 961 386
After Income Taxes Discounted at (%/year)
RESERVES 0% 5% 9% 10% 15% 20%
CATEGORY (MM$) (MM$) (MM$) (MM$) (MM$) (MM$)
PROBABLE
Dover 2,842 1,274 680 580 247 76
MacKay 2,485 1,100 591 505 219 66
Hangingstone 493 261 136 109 6 (63)
Other Tax Pools 137 88 65 61 44 33
TOTAL PROBABLE((2)) 5,957 2,723 1,473 1,256 516 112
POSSIBLE
Dover 620 211 102 87 44 28
MacKay 935 273 118 98 45 27
Hangingstone 76 46 30 28 14 5
Other Tax Pools 1 1 1 1 1 1
TOTAL POSSIBLE((3)) 1,632 531 250 214 104 61
TOTAL PROBABLE
PLUS
POSSIBLE((2)(3)
(5)) 7,589 3,255 1,723 1,469 620 173
Notes:
(1) 'Gross Reserves' are the Company's working interest (operating
or non-operating) share before deducting royalties and without
including any royalty interests of the Company. 'Net Reserves'
are the Company's working interest (operating or
non-operating) share after deduction of royalty obligations,
plus the Company's royalty interests in reserves.
(2) 'Probable Reserves' are those additional reserves that are
less certain to be recovered than Proved Reserves. It is
equally likely that the actual remaining quantities recovered
will be greater or less than the sum of the estimated Proved
Reserves plus Probable Reserves.
(3) 'Possible Reserves' are those additional reserves that are
less certain to be recovered than Probable Reserves. There is
a 10% probability that the quantities actually recovered will
equal or exceed the sum of Proved Reserves plus Probable
Reserves plus Possible Reserves.
(4) The pricing assumptions used in the GLJ Report and the D&M
Report with respect to values of future net revenue as well as
the inflation rates used for operating and capital costs are
set forth below under '- GLJ - April 1, 2011 Pricing
Assumptions'. GLJ is an independent qualified reserves
evaluator appointed pursuant to NI 51-101.
(5) Totals may not add due to rounding.
(6) The Company's investments in the Dover and MacKay assets are
accounted for by the equity method and the Reserve and future
net revenue estimates set out above reflect the Company's
indirect 40% working interests in the MacKay and Dover assets
which are held directly by the Company's wholly owned
subsidiaries, AOSC (MacKay) and AOSC (Dover), respectively.
Contingent Resources:
The table below summarizes the Company's Contingent Resources and
associated future net revenues as of April 30, 2011, as evaluated by
GLJ in the GLJ Report and by D&M in the D&M Report, respectively.
It should not be assumed that the estimates of recovery, production and
net revenue presented in the tables below represent the fair market
value of Athabasca's bitumen resources. There is no assurance that the
forecast prices and cost assumptions will be realized and variances
could be material. The actual resources may be greater than or less
than the estimates provided. The contingencies which currently prevent
the classification of the Contingent Resources disclosed in the table
as reserves consist of: further facility design, preparation of firm
development plans, and regulatory applications (including associated
reservoir studies and delineation drilling), and Company approvals.
There is no certainty that it will be commercially viable to produce
any portion of the Contingent Resources.
Both the GLJ Report and the D&M Report are based on GLJ's April 1, 2011
pricing (see GLJ - April 1, 2011 Pricing Assumptions below).
Contingent Resources((1 (10), (13)(15)) (mmbbls)
Low Estimate((2)) Best Estimate( High Estimate(()
(3)) (4))
GLJ Report ((5))
Established
Technology
MacKay 345 573 983
Dover 772 1,221 1,616
Dover West
Clastics 1,284 1,991 2,867
2,401 3,785 5,466
Technology Under
Development(8)
Dover West Leduc
Carbonates N/A ((9)) 2,866 4,977
Grosmont ((14)) N/A((9)) 418 1,876
Total GLJ Report 2,401 7,070 12,319
D&M Report ((6))
Established
Technology
Birch 1,344 1,885 2,614
Hangingstone 642 718 906
Total D&M Report 1,986 2,603 3,520
TOTAL COMPANY(5, 6,
7) 4,387 9,672 15,839
Before Income Tax Discounted at (%/year)
CONTINGENT
RESOURCE 0% 5% 9% 10% 15% 20%
CATEGORY mmbbl (MM$) (MM$) (MM$) (MM$) (MM$) (MM$)
Best
Estimate
GLJ Report(
(5))
Existing
Technology
Dover ((10)
(16)) 1,221 42,629 10,870 4,355 3,526 1,301 477
Dover West 1,991 59,066 14,924 5,590 4,400 1,245 143
Clastics
MacKay((10)
(16)) 573 16,117 4,755 2,034 1,666 640 241
Technology
under
Development(
(8))
Dover West 2,866 92,733 27,975 12,188 10,023 3,906 1,474
Carbonates
Grosmont (
(14)) 418 9,808 2,191 603 411 (53) (168)
Other Tax - - - - - - -
Pools
D&M Report(
(6))
Existing
Technology
Birch 1,885 67,729 15,870 4,958 3,581 150 (905)
Hangingstone
((12)) 718 28,500 5,998 1,621 1,082 (154) (488)
Total Best
Estimate ( 9,672 316,582 82,583 31,348 24,690 7,035 774
(7) )
((13)(14))
After Income Tax Discounted at (%/year)
CONTINGENT
RESOURCE 0% 5% 9% 10% 15% 20%
CATEGORY mmbbl (MM$) (MM$) (MM$) (MM$) (MM$) (MM$)
Best
Estimate
GLJ Report(
(5))
Existing
Technology
Dover ((10)
(16)) 1,221 31,790 7,924 3,078 2,466 834 242
Dover West 1,991 43,929 10,673 3,758 2,887 604 (164)
Clastics
MacKay((10)
(16)) 573 11,957 3,412 1,402 1,134 393 113
Technology
under
Development(
(8))
Dover West 2,866 69,174 20,461 8,676 7,067 2,542 768
Carbonates
Grosmont (
(14)) 418 7,292 1,494 316 177 (144) (207)
Other Tax - 458 71 34 30 23 18
Pools
D&M Report(
(6))
Existing
Technology
Birch 1,885 50,079 11,372 3,208 2,180 (420) (1,175)
Hangingstone
((12)) 718 20,975 4,407 1,040 631 (359) (605)
Total Best
Estimate (
(7) ) 9,672 235,654 59,815 21,512 16,571 3,473 (1,009)
((13))((14)
())
Notes:
(1) 'Contingent Resources' are defined in the Canadian Oil and
Gas Evaluation Handbook (the 'COGE Handbook') as those
quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations using
established technology or technology under development, but
which are not currently considered to be commercially
recoverable due to one or more contingencies. Contingencies
may include factors such as economic, legal, environmental,
political and regulatory matters or a lack of markets. It is
also appropriate to classify as 'Contingent Resources' the
estimated discovered recoverable quantities associated with a
project in the early evaluation stage. Contingent Resources
are further classified in accordance with the level of
certainty associated with the estimates and may be sub
classified based on project maturity and/or characterized by
their economic status. The volumes of contingent bitumen
resources in the above table were calculated at the outlet of
the proposed extraction plant and are the Company's working
interest (operating or non-operating) share before deduction
of royalty obligations.
(2) 'Low Estimate' is a classification of estimated resources
described in the COGE Handbook as being considered to be a
conservative estimate of the quantity that will actually be
recovered. It is likely that the actual remaining quantities
recovered will exceed the Low Estimate. If probabilistic
methods are used, there should be a 90% probability (P90)
that the quantities actually recovered will equal or exceed
the Low Estimate.
(3) 'Best Estimate' is a classification of estimated resources
described in the COGE Handbook as being considered to be the
best estimate of the quantity that will actually be
recovered. It is equally likely that the actual remaining
quantities recovered will be greater or less than the Best
Estimate. If probabilistic methods are used, there should be
a 50% probability (P50) that the quantities actually
recovered will equal or exceed the Best Estimate.
(4) 'High Estimate' is a classification of estimated resources
described in the COGE Handbook as being considered to be an
optimistic estimate of the quantity that will actually be
recovered. It is unlikely that the actual remaining
quantities recovered will exceed the High Estimate. If
probabilistic methods are used, there should be a 10%
probability (P10) that the quantities actually recovered will
equal or exceed the High Estimate.
(5) Based on the GLJ Report dated effective as of April 30, 2011.
(6) Based on the D&M Report dated effective as of April 30, 2011.
(7) These volumes are arithmetic sums of multiple estimates of
contingent bitumen resources, which statistical principles
indicate may be misleading as to volumes that may actually be
recovered. Readers should give attention to the estimates of
individual classes of resources and appreciate the differing
probabilities of recovery associated with each class as
explained. In particular, readers should be aware that the
likelihood of attaining the sum of the High Estimate is
extremely low and of the Low Estimate quite high.
(8) The Company's resources at its Dover West Carbonates and
Grosmont assets are contained in carbonate reservoirs. Steam
Assisted Gravity Drainage (SAGD) and Cyclic Steam Stimulation
(CSS), the recovery processes being considered to develop
these assets, are considered by GLJ to be 'technology under
development' in carbonate reservoirs. The successful
development of the Company's carbonate reservoirs depends on,
among other things, the successful development and
application of SAGD, Thermal Assisted Gravity Drainage (TAGD)
and CSS or other recovery processes to carbonate reservoirs.
Although the technology has been developed for application to
non-carbonate reservoirs, there are no known successful
commercial projects that use SAGD, TAGD or CSS to recover
bitumen from carbonate formations and there exists a large
range in the expected recoverable volumes, the lower end of
which may not be economically viable. The principal risks
associated with SAGD and CSS recovery in carbonate reservoirs
are: (i) the possibility of unexpected steam channelling
which would increase steam requirements resulting in
increased costs and potentially reduced economically
recoverable bitumen volumes; and (ii) potential mechanical
operating problems due to production of fines which could
cause wellbore plugging and reduced bitumen production rates
and potential interruption of surface production operations.
Although the technical risks associated with 'technology
under development' have been accounted for in the GLJ Report,
the timeline for verification of 'technology under
development' has inherent uncertainty. The Company is also
testing TAGD as an alternate bitumen recovery process in the
Dover West Carbonates. The principal risk associated with
TAGD recovery in carbonate reservoirs is to prove TAGD as a
commercially viable bitumen recovery process. Development
will involve significant capital expenditures and a lengthy
time to project payout and project payout is not assured. If
a pilot project and/or the technology under development do
not demonstrate potential commerciality in carbonate
reservoirs then the Company's projects on these assets may
not proceed and this may occur only after significant
expenditures have been incurred by the Company. With respect
to the Company's Grosmont asset, the Company's strategy is to
continue delineation drilling efforts in the area in order to
increase the resource base. The Company has not prepared a
development plan or timeline for the Grosmont area, and is
monitoring industry activity toward demonstrating successful
development and production methods for the Grosmont
Formation. See 'Independent Reserve and Resource
Evaluations'.
(9) The GLJ Report does not calculate the discounted future net
revenues associated with the Dover West Carbonates and
Grosmont assets in the Low Estimate case because GLJ does not
believe that a high certainty or Low Estimate case would be
economic. Readers should be aware that if calculated, the
discounted future net revenues associated with the Dover West
Carbonates and Grosmont assets in the Low Estimate would
likely be negative since the Low Estimate result would be
realized only after considerable capital has been invested.
(10) There is no certainty that it will be commercially viable to
produce any portion of the resources.
(11) These figures do not include the Probable and Possible
Reserves volumes and values that have been assigned by GLJ to
Phase 1 of the MacKay Oil Sands Project and to Phase 1 of the
Dover Oil Sands Project. See 'Reserves above.
(12) These figures do not include the Probable and Possible
Reserves volumes and values that have been assigned by D&M to
Hangingstone Project. See 'Reserves' above.
(13) Totals may not add due to rounding.
(14) Athabasca's strategy is to continue delineation drilling
efforts in the Grosmont area in order to increase the
resource base at this asset. Athabasca has not prepared a
development plan or timeline for the Grosmont area, and is
monitoring industry activity toward demonstrating successful
development and production methods for the Grosmont
Formation. Other than as noted above, Athabasca has no
current plans to pursue the development of the Grosmont asset
and the net present value shown here should therefore not be
considered to be a reasonable assessment of the current value
of the Grosmont asset to the Company.
(15) The resource estimates set out above reflect the Company's
100% working interest in the Hangingstone, Dover West and
Birch assets, 40% working interests in the MacKay and Dover
assets and 50% working interest in the Grosmont asset.
(16) [The Company's investments in Dover and MacKay are accounted
for by the equity method and the resource and future net
revenue estimates set out above reflect only the Company's
40% working interests in the MacKay and Dover areas which are
respectively held directly by the Company's wholly owned
subsidiaries, AOSC (MacKay) and AOSC (Dover).
GLJ - April 1, 2011 Pricing Assumptions ((1), (2))
West Texas
Intermediate Light,Sweet LLB Crude Carbonates
Crude Oil Oil Stream Sandstones 0.46
Bank of Crude Oil at (40 Quality Dil-bit Diluent 0.42857 Bitumen
Canada Cushing API,0.3%S) at Quality at Field Bitumen Wellhead
Oil Sands Average Oklahoma at Edmonton Hardisty Differential Current Wellhead Current(
Inflation Noon Rate Current Current Current Current (3) Current (4) )
% $US/$Cdn $US/bbl $Cdn/bbl $Cdn/bbl $Cdn/bbl $Cdn/bbl $Cdn/bbl $Cdn/bbl
2011 2.0 0.980 105.00 103.06 80.90 -3.50 118.34 51.12 51.75
2012 2.0 0.980 102.00 101.02 81.32 -2.75 110.05 56.35 55.18
2013 2.0 0.980 100.00 100.51 80.91 -2.00 108.52 57.49 56.38
2014 2.0 0.980 100.00 101.02 81.32 -1.25 109.04 62.64 61.63
2015 2.0 0.980 100.00 101.12 81.40 -1.25 109.14 62.71 61.70
2016 2.0 0.980 100.00 101.12 81.40 -1.28 109.14 62.68 61.67
2017 2.0 0.980 101.36 102.51 82.52 -1.30 110.56 64.70 63.71
2018 2.0 0.980 103.38 104.57 84.18 -1.33 112.66 66.14 65.13
2019 2.0 0.980 105.45 106.68 85.88 -1.35 114.82 67.96 66.94
2020 2.0 0.980 107.56 108.84 87.61 -1.38 117.01 69.45 68.42
2021 2.0 0.980 109.71 111.02 89.36 -1.41 119.23 72.04 71.01
2022 2.0 0.980 111.91 113.24 91.15 -1.44 121.49 73.58 72.54
2023 2.0 0.980 114.14 115.50 92.97 -1.46 123.80 75.15 74.10
2024+ 2.0 0.980 +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr
Notes
(1) Blending Ratio = 1 bbl bitumen: 0.42857 bbl Diluent for
Bitumen Netback pricing. This blending ratio equates to a
bitumen blend (dilbit) comprised of 30% condensate and 70%
bitumen.
(2) Blending Ratio = 1 bbl bitumen: 0.46 bbl Diluent for
Carbonates Bitumen Netback pricing. This blending ratio
equates to a bitumen blend (dilbit) comprised of 31.5%
condensate and 68.5% bitumen.
(3) Includes diluent transportation and postings premiums of
Cdn$6.00/bbl.
(4) Net of transportation costs of Cdn$3.50/bbl from 2011 through
2013, Cdn$3.50/bbl from 2014 through 2016, Cdn$2.75/bbl from
2017 through 2018, Cdn$2.50 from 2019through 2020, and
Cdn$1.75/bbl thereafter.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/June2011/24/c9019.html
Media & Financial Community
Heather Douglas
Vice President, Communications & External Affairs
(403) 532-7408
hdouglas@aosc.com
