Saturn Oil & Gas Inc. is pleased to announce the results of the independent reserves evaluation of the Company's crude oil and natural gas assets, dated January 29, 2024 and effective December 31, 2023, in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and in accordance with the Canadian Oil and Gas Evaluation Handbook (the "Reserve Report").
Reserves Evaluation Highlights
The Company's Reserve Report, prepared by Ryder Scott Company-Canada ("Ryder Scott"), evaluated the Company's oil and gas assets in Saskatchewan and Alberta and is highlighted by:
145.3 million BOE of Total Proved + Probable ("TP+P") reserves1, representing a 131% year over year increase;
$1.4 billion net present value of future net revenue of the Proved Developed Producing ("PDP") reserves discounted at 10% ("NPV10%")4;
879 gross (727.2 net) booked drilling locations, 78% located in Saskatchewan and 22% in Alberta;
High oil weighting with TP+P reserves comprised of 82% light & medium oil and natural gas liquids ("NGL");
Long reserve life index ("RLI") of 6.2 years for PDP1 reserves and 14.8 years for TP+P1 reserves;
2023 TP+P F&D costs of $19.13 /boe (2.5x recycle ratio)1;
2023 TP+P FD&A costs of $15.29 /boe (3.1x recycle ratio)1;
Net asset value ("NAV") per share:
Proved Developed Producing of $6.72;
Total Proved of $10.89; and
Total Proved + Probable of $16.69.
"In 2023 Saturn executed the largest drilling program in its history, complimented by the impactful acquisition of Ridgeback Resources Inc., which together drove significant production and reserve growth for the Company. The Ridgeback acquisition added 474 gross (363.7 net) booked future drilling locations2 which will support future oil and gas production and sustainable free cash flow generation," commented Justin Kaufmann, Chief Development Officer. "We are proud of our development programs and strategic acquisitions that have amounted to over 150 MMBOE of TP+P reserves additions, over the past three years, at an attractive average finding, development and acquisition cost of $14.35 per BOE, accounting for expected future development costs."
As a result of the successful 2023 drilling program and the acquisition of Ridgeback, Saturn's average oil and gas production in Q4 2023 was approximately 26,890 boe/d and December 2023 average production of approximately 28,000 boe/d, based on field estimates, was in excess of the company's guidance exit rate of 27,000 boe/d.
The Reserve Report encompasses 680 gross (576.6 net) drilling location in Saskatchewan and 199 gross (150.6 net) drilling locations in Alberta. Included in the Saskatchewan booked locations are 20 gross (18.1 net) Open Hole Multi-Lateral ("OHML") locations targeting Bakken light oil in the Viewfield area. The recent advancements in OHML drilling is expected to continue to open increased drilling inventory with greater capital efficiencies. The Company has an internally estimated additional 550 gross (450 net) unbooked drilling locations in Alberta and Saskatchewan, which combined with the booked locations of the Reserve Report, amounts to over twenty years of drilling inventory.
Summary of Gross Oil and Gas Reserves and Net Present Value of Revenue
The following tables are a summary of the Ryder Scott estimated Company reserves (Company share gross volumes) and net present values ("NPV") of future net revenue, before tax, based on forecast price and costs as contained in the Reserve Report2,4,5. The Reserve Report encompasses 100% of the Company's oil and gas properties as of December 31, 2023.