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					Milo/Chinchaga
Package
                                                                     Milo/Chinchaga Package




Package Highlights
   May 2010 working interest sales of 2.0 MMcf/d gas and 20 bbl/d oil & NGL’s (351 BOE/d)
   • 11 producing oil and gas wells in the Devonian Pine Point and Slave Point horizons
   • Production from Milo, Chinchaga and Rainbow properties; all production is non-operated
   Total Proved reserves of 495 MBOE (all producing); Proved plus Probable reserves of 663 MBOE (94% gas)
   • One Probable tie-in opportunity (100% W.I.) recognized at Wargen by GLJ (52 MBOE)
   • Mature production from large OGIP pools with low reserves risk
   Low operating costs of $9.33/BOE with royalties of 11.7% in 2009; forecast to be $9.22/BOE in 2010
   • 30.4% interest in West Clarke Lake gas plant where 83% of Daylight’s production is processed
   Various interests in 50,591 gross acres (26,115 net) of total land
   • 39,319 total acres of undeveloped land (23,584 net) including 19,840 acres at Petitot (100% W.I.)
                                                            Milo/Chinchaga Package Production & Reserves Summary
                                                                  Annualized                                 Reserves Volumes                                       Reserves Values
                              Current Production Summary            2010                    Total Proved                           Proved plus Probable            Pre tax NPV@10%
       Package
                            Liquids        Gas         Total         NOI         Liquids        Gas          Total       Liquids           Gas            Total     TP         P+P
                            (bbl/d)      (Mcf/d)       (BOE/d)       (M$)         (Mbbl)       (MMcf)       (MBOE)        (Mbbl)          (MMcf)          (MBOE)   (M$)        (M$)

Milo/Chinchaga                20          1,987           351           1,710           23    2,833           495           38          3,751              663     6,250      8,043
Reserves based on look ahead analysis from 12/31/09 report prepared by GLJ Petroleum Consultants eff. 10/01/10 using GLJ 07/10 pricing.
NPV's shown are before tax and using Alberta's/British Columbia's existing royalty regime.
Production is from May 2010 Financials.



                                                                        Milo/Chinchaga Package 9 - 2
Package Snapshot

Package Overview
The Milo/Chinchaga Package is a “whitemap” of Daylight is working interests north of Township 94 in Alberta
and northeast British Columbia, and includes the producing Milo, Chinchaga and Rainbow properties along
with undeveloped land in other areas. The majority of the Company’s production (83%) comes from Progress
Energy-operated Pine Point gas wells at Milo. Daylight owns a 30.4% working interest in the West Clarke Lake
Compressor Station there, which helps reduce operating costs. The Chinchaga Property is operated by Hunt Oil
and contributes 16% of the Package’s production from two Slave Point oil wells. The remaining production comes
from minor interests in three Slave Point gas wells at Rainbow operated by Apache. Within these producing
properties Daylight holds interests ranging from 4% to 50%. Daylight does hold higher working interests in some
of the Package’s undeveloped land, though Daylight has not been active in the area and no drilling has taken
place on any of the Company’s assets since early 2006.

Land Overview
Daylight has interest in 50,591 gross acres of land which comprise the Milo/Chinchaga Package, including 160 gross
acres of royalty interest lands. Mineral rights generally are held from surface to the base of the producing horizons
at Milo and Chinchaga. There is a relatively high component of higher working interest undeveloped land within
the Package, with 39,319 gross acres (23,584 net) currently undeveloped; the majority of this (19,840 acres) is
concentrated at the 100% interest Petitot Property. Daylight’s interests are Crown leases and there are no material
near term expiries within the Package.

Reserves, Production and Financial Overview
The Package includes Proved Producing reserves of 495 MBOE (95% gas weighted) assigned to 11 wells that
account for 75% of the Proved plus Probable reserves (663 MBOE) assigned by GLJ. Probable reserves are
associated with both improved performance of Proved Producing reserves and one tie-in opportunity. Working
interest sales from the Milo/Chinchaga Package averaged 2.0 MMcf/d of gas, 14 bbl/d oil, and 6 bbl/d of NGL’s
(351 BOE/d) in May 2010. The majority of the production is focused at Milo with 83% of the Package production.
All of the production in the Package is derived from the Devonian Pine Point and Slave Point horizons.

Opportunity Overview
The Company has identified a tie-in of a single Bluesky/Dunlevy gas well within the Wargen Property (100% W.I.)
that has been assigned Probable reserves of 278 MMcf and 6 Mbbl of NGL by GLJ. Though Daylight has not been
active on lands within the Package, there has been some recent offsetting drilling activity.
                                      Milo/Chinchaga Package Reserves Metrics
                                        Production ($/BOE/d)                         Volumes ($/BOE)           RLI
         Reserves Category
                                    10%         15%          20%             10%          15%          20%     yrs
   Proved Producing                17,790     15,746        14,158           12.62        11.17        10.05   3.9
   Total Proved                    17,790     15,746        14,158           12.62        11.17        10.05   3.9
   Proved plus Probable            22,893     20,035        17,849           12.13        10.61         9.46   5.2
   On current production of:        351     BOE/d




                                              Milo/Chinchaga Package 9 - 3
Milo/Chinchaga Package Introduction
The Milo/Chinchaga Package includes all of Daylight’s non-core interests north of Township 94 in Alberta and
northeast British Columbia. The Package produced 2.0 MMcf/d of gas and 20 bbl/d liquids (working interest sales)
in May 2010, all from the Devonian Pine Point and Slave Point horizons. The majority of this production is from
mature large OGIP reservoirs providing a very stable and predictable decline. The Package includes Daylight’s
interests in three producing properties: Milo (290 BOE/d operated by Progress), Chinchaga (56 BOE/d operated
by Hunt), and Rainbow (5 BOE/d operated by Apache). Daylight has working interests in the West Clarke Lake
Dehydration and Water Disposal facility as well as related gas gathering pipelines and infrastructure in the Milo
Property which help reduce operating costs within the Package, which averaged $9.33/BOE in 2009.

Daylight has not been active in the area and the majority of the properties have not seen any development for
several years. There is only one identified opportunity booked by GLJ: a 100% interest tie-in of a Bluesky/Dunlevy
well at Wargen. Additional potential also exists on the Company’s 23,584 net acres of undeveloped land.

Land Summary
Daylight’s interests in the Package include 50,591 total gross acres (26,115 net acres) including 160 acres of royalty
interest land at Rainbow. Working interests vary throughout the properties and all of the current production is
non-operated. The Package includes 39,319 acres of undeveloped land. Daylight’s acreage consists of Crown
leases and licenses with rights generally held from surface to the base of the producing horizon. There are no
material near term expiries within the Package.
                                    Milo/Chinchaga Package Land Summary (Acres)
                                         Developed Land        Undeveloped Land         Royalty Land          Total Land
Property                                 Gross      Net         Gross     Net      Developed Undeveloped   Gross       Net
Chinchaga                                 320         160       640        320         0         0          960       480
Petitot                                    0           0       19,840     19,840       0         0         19,840    19,840
Rainbow                                  4,000        277      2,080       139        160        0         6,240      416
Dahl                                     1,388        347      13,185     2,264        0         0         14,573    2,611
Milo                                     3,338        971      3,574      1,021        0         0         6,911     1,992
Sahtaneh                                  670         218         0          0         0         0          670       218
Wargen                                   1,398        559         0          0         0         0         1,398      559
Total Package                           11,113       2,531     39,319     23,584      160        0         50,591    26,115
The majority of the undeveloped land is concentrated at Petitot, where a predecessor company of Daylight
acquired 19,840 acres of exploration acreage with PNG rights from surface to basement in October 2008 for
bonuses ranging from $240/ha to $322/ha. These 4-year licenses are held under broker. Though Daylight has
not been active in the area, Insignia Energy has recently had exploration success within the Slave Point offsetting
the Company’s lands at Petitiot.




                                                 Milo/Chinchaga Package 9 - 4
Reserves, Production and Financial Summary
Reserves were externally evaluated by GLJ who have provided a mechanical update of the December 31,
2009 report with a look-ahead analysis at September 30, 2010 utilizing GLJ’s July 2010 forecast pricing. Proved
Producing reserves represent 100% of the 495 MBOE of Total Proved reserves. Probable reserves (168 MBOE)
represent about 25% of the 663 MBOE of Proved plus Probable reserves, which are 94% gas weighted. Probable
reserves are associated with improved production performance from the existing producing well inventory and
the Probable tie-in at Wargen.
                                           Milo/Chinchaga Package Reserves Volumes and Values
                                               Company Interest Reserves                                      Pre tax NPV discounted @
          Reserves Category              Oil          NGL           Gas         Total       Gas Split       10%          15%       20%
                                       (Mbbl)        (Mbbl)       (MMcf)       (MBOE)         (%)           (M$)         (M$)      (M$)
    Proved Producing                     13            10          2,833         495           95%         6,250         5,532     4,974
    PUD/PDNP                              0             0            0            0            n/a           0             0         0
    Total Proved                         13            10          2,833         495           95%         6,250         5,532     4,974
    Probable                              5            10           918          168           91%         1,793         1,507     1,297
    Proved plus Probable                 18             20          3,751           663        94%         8,043          7,039    6,271
    Reserves based on look ahead analysis from 12/31/09 report prepared by GLJ effective 10/01/10 using GLJ July 2010 pricing.
    NPV's shown are before tax and using Alberta's/British Columbia's existing royalty regime.
All of the Proved reserves are producing, with reserves of 2.8 Bcf and 23 Mbbl of liquids assigned to 11 producing
wells within the Pine Point and Slave Point. The majority reserves are derived from large OGIP reservoirs with
good pressure data supporting reserves assessments.
                                              GLJ Reserves Breakdown by Category




                                                         Milo/Chinchaga Package 9 - 5
Reserves, Production and Financial Summary (Cont’d)
The majority of the reserves within the Package are concentrated within the Progress-operated Milo Property,
representing 76% of the Package’s 663 MBOE of Proved plus Probable reserves. Chinchaga contributes 13% (83
MBOE) of the Package’s reserves. The Wargen Property’s reserves are all Probable and are attributed to the
Bluesky/Dunlevy tie-in opportunity. Very minor producing reserves have been attributed to Daylight’s 4% to 12%
working interests in the Rainbow Property.
                                  GLJ P+P Reserves Volume by Property




Based on a Proved plus Probable BT 10% NPV, Milo contributes 72% of the Package’s value, while Chinchaga
accounts for 22%, together comprising over 94% of the Package’s total reserves value. Wargen’s value is
disproportionately lower compared to Chinchaga as there is $103,000 of capital required to tie-in the well.
                                   GLJ P+P Reserves Value by Property




                                           Milo/Chinchaga Package 9 - 6
Reserves, Production and Financial Summary (Cont’d)
In May 2010, the Milo/Chinchaga Package averaged working interest sales of 2.0 MMcf/d of gas, 14 bbl/d of oil
and 6 bbl/d of NGL from 11 wells. The majority of the production (99%) is derived from mature reservoirs within
the Milo and Chinchaga properties that provide a very stable and predictable production base. The forecast
production plot includes a Probable wedge associated with improved performance from producing wells,
providing upside to the Proved case without associated capital expenditures.
                        Milo/Chinchaga Historical and GLJ Forecast Production




Current Package production slightly exceeds the forecast Proved Developed Producing volumes of 335 BOE/d,
providing confidence in the GLJ year end evaluation. Rainbow’s production comes from minor 4% to 12% working
interest in two Apache-operated Slave Point gas wells in Township 117, Range 5W6.
                                 Working Interest Production by Property




                                           Milo/Chinchaga Package 9 - 7
Reserves, Production and Financial Summary (Cont’d)
The Milo/Chinchaga Package is forecast to provide net operating income of $1.7 million in 2010, based on
accounting data through May, combined with the GLJ look-ahead report. Capital of $105,000 is forecast in 2011
for the Probable tie-in opportunity at the Wargen Property. Operating costs within the Package are low, averaging
$9.33/BOE in 2009 with an average royalty rate of 12%.
                                                    Milo/Chinchaga Package Financial Summary

                                                              Actual       Annualized         Forecast         Forecast          Forecast        Forecast
                                                               2009          2010               2011             2012              2013            2014

       Production Rates
          Oil                               (bbl/d)            15              14                 8                8                 5              5
          NGL                               (bbl/d)             6               7                14               11                 8              5
          Gas                              (Mcf/d)            2,412           2,115             1,986            1,655             1,384          1,194
       Total                               (BOE/d)             424             373               353              295               244            210

       Operating Income
       Revenue
          Oil Revenue                        (M$)              332             416               291              244               206            175
          NGL Revenue                        (M$)              113             164               359              292               241            203
          Gas Revenue                        (M$)             2,903           3,006             3,401            3,274             2,976          2,730
          Other Revenue                      (M$)               6               4                15                9                 0              0
       Total Revenue                         (M$)             3,354           3,590             4,066            3,819             3,423          3,108


       Expenses
          Royalties & Min Tax                (M$)              393             623               937              877               772            683
          Operating Costs                    (M$)             1,529           1,318             1,239            1,107             1,040          1,003
          Other Costs                        (M$)               87              61               136              106                98             78
       Total Expenses                        (M$)             1,835           1,880             2,040            1,878             1,714          1,608


       Net Operating Income                  (M$)             1,518           1,710             2,026            1,941             1,709          1,500
       Capital Requirements                  (M$)             2,355           3,516              105              82                 0              0

       Calculated Values
           Average Oil Price                 ($/bbl)          60.65
                                                              60 65           80 62
                                                                              80.62             97.00
                                                                                                97 00            81.33
                                                                                                                 81 33            103 00
                                                                                                                                  103.00         87 50
                                                                                                                                                 87.50
           Average NGL Price                 ($/bbl)          47.64           67.68             71.80            73.00             80.33         101.50
           Average Gas Price                ($/Mcf)            3.30            3.89              4.69             5.42              5.89          6.25
           Average Price                    ($/BOE)           21.70           26.35             31.56            35.47             38.39          40.45

           Royalty Rate                       (%)             12%              17%               23%              23%               23%            22%
           Operating Cost                   ($/BOE)           9.33             9.22              8.56             9.30             10.56          12.04
       Netback                             ($/BOE)            9.82            12.55             15.73            18.03             19.17          19.52
       Notes:
       Reserves based on look ahead analysis from 12/31/09 report prepared by GLJ Petroleum Consultants eff. 10/01/10 using GLJ 07/10 pricing.
       Actuals are from Company lease operating statements.
       Forecasts are based on GLJ Petroleum Consultants Proved plus Probable Category.
       Numbers may not match summaries or add due to rounding.




                                                                Milo/Chinchaga Package 9 - 8
Reserves, Production and Financial Summary (Cont’d)
Reinforcing the stability of the production base, 8 of the 11 producing UWI’s within the Package still produce
at a gross rate greater than 61 BOE/d, despite being from mature Devonian wells. The majority of these high
productivity UWI’s are situated in Milo, including the three producing in excess of 100 BOE/d.
                                     Total Producing Well Count by Gross Rate




Opportunity Summary
The GLJ report recognizes one Probable opportunity within the Package associated with the tie-in of a Bluesky/
Dunlevy standing gas well in the Wargen area. The 100% working interest 200/c-002-F 094-H-06 well directly
offsets a Nuvista Bluesky gas well currently producing at a stable rate of 111 Mcf/d and has produced 1.4 Bcf
since 1999. Daylight estimates $103,000 of capital would be required to tie the well into third party facilities.
                                                         Milo Chinchaga Opportunity List
                                                                                              W.I.                         Proved plus Probable
                                                                                      W.I.   Capital   Reserves     Gas      Oil/NGL      Total Reserves
            Opportunity   Property      Operation                  Zone               (%)     (M$)     Category   (MMcf)     (Mbbl)          (MBOE)
00/C 002 F/094 H 06       Wargen       Equip & Tie in         Bluesky/Dunlevy        100%      103     Probable     278          6              52
                                                                                     TOTAL     103         1        278          6              52

Daylight has not actively worked the assets within the Package which are generally non-operated. However,
there is a significant block of 100% working interest contiguous land at Petitot that was acquired in 2008 by a
predecessor company that has been offset by recent successful Slave Point drilling conducted by Insignia Energy.




                                                        Milo/Chinchaga Package 9 - 9
Individual Property Descriptions - Milo Property

                                                                                  Milo Property




The Milo Property includes Daylight’s working interest land in NTS map block 94-J-10 and 94-J-11 in northeast
British Columbia, comprising 6,911 gross acres of land with various non-operated interests. In May 2010, working
interest sales averaged 1.7 MMcf/d gas (290 BOE/d) from eight wells, accounting for 83% of the Package’s total
production and 72% of its total reserves value. All of Daylight’s production in the Property is derived from large
OGIP gas reservoirs in the Devonian Pine Point. Progress Energy operates all of the production in the Property,
with gas processed at the Progress-operated West Clarke Lake facility at a-06-G/094-J-10 where Daylight owns
a 30.4% interest.

The majority of production is derived from the large Milo Pine Point ‘A’ Pool developed in the early 2000’s. Gas
is slightly sour, with an H2S concentration of 0.03%. Daylight owns a 38% working interest in 6 producing wells in
the pool; the Company also owns a 27.55% working interest in one producing well within the Milo Pine Point ‘C’
Pool located in the west end of the Property.

The Milo Property is forecast to provide $1.7 million of net operating income in 2010. Total Proved reserves are
estimated to be 423 MBOE (100% gas) with Probable reserves of 84 MBOE attributed to improved performance.
                                                                    Milo Property Production & Reserves Summary
                                                                    Annualized                                 Reserves Volumes                                Reserves Values
                                Current Production Summary            2010                     Total Proved                      Proved Plus Probable         Pre tax NPV@10%
       Property
                             Liquids        Gas        Total           NOI          Liquids        Gas        Total       Liquids        Gas          Total    TP           P+P
                             (bbl/d)       (Mcf/d)       (BOE/d)        (M$)         (Mbbl)          (MMcf)   (MBOE)      (Mbbl)       (MMcf)        (MBOE)   (M$)        (M$)
Milo                            0          1,742          290          1,655           0             2,537     423          0           3,042         507     4,950       5,775
Reserves prepared by GLJ Petroleum Consultants, effective Oct 1, 2010 using GLJ July 2010 pricing.
NPV's shown are before tax and use British Columbia's existing royalty regime.
Production is from May 2010 Financials.




                                                                          Milo/Chinchaga Package 9 - 10
Individual Property Descriptions - Milo Property (Cont’d)
The Property provides Daylight with low decline, low operating cost production. Three wells contribute 79% of
production: 200/b-072 G 94-J-11/02, 200/c-077-H 094-J-11/02, and 200/c-065-H 094-J-11/00.
                                     Milo Working Interest Production




The 200/b-072-G 094-J-11/02 well (27.55% Daylight W.I.) is the most prolific in the Property and has produced
over 17.0 Bcf of gas since being drilled and placed on production from the Pine Point ‘C’ Pool in 2001. The well
came on production at an initial rate of 4.4 MMcf/d increasing to over 7.2 MMcf/d in 2003 and exhibiting very
little decline over 10 years, producing 3.4 MMcf/d (gross) in June 2010. The 200/c-065-H 094-J-11/00 well
(38.0% Daylight W.I.) was drilled in 2001 into the Pine Point ‘A’ Pool and has produced over 7.9 Bcf; the well
produced 975 Mcf/d (gross) in June 2010.
              200/b-072-G Production                                       200/c-065-H Production




                                           Milo/Chinchaga Package 9 - 11
Individual Property Descriptions - Chinchaga Property

                                            Chinchaga Property




The Chinchaga Property includes Daylight’s 50% working interest in 960 gross acres, including 320 gross acres
of undeveloped land. The Property includes Total Proved reserves of 58 MBOE (all producing) and Proved plus
Probable reserves of 83 MBOE. In May 2010, working interest sales averaged 20 bbl/d of light oil (~47o API) and
213 Mcf/d of solution gas from two Devonian Slave Point wells located in separate pools, both operated by Hunt
Oil (Daylight 50% W.I.). The 100/15-04-098-09W6/02 well is in the 3-well Slave Point ‘J’ Pool, though it’s the
only currently producing well and averaged 15 bbl/d of oil and 266 Mcf/d solution gas (gross) in July 2010. The
100/16-33-097-09W6 well produces from the single well Slave Point ‘I’ Pool and produced 14 bbl/d oil and 366
Mcf/d solution gas (gross) over the same period.
           Chinchaga 16-33 Production                                      Chinchaga 15-4 Production




                                           Milo/Chinchaga Package 9 - 12
Individual Property Descriptions - Wargen Property

                                                      Wargen Property




The Wargen Property includes Daylight’s interest in 1,398 gross acres of land (559 net acres). This currently non-
producing Property includes GLJ recognized reserves associated with the tie-in of the 200/c-002-F 094-H-06/00
well in which Daylight has a 100% working interest prior to penalty payout. GLJ has assigned Proved plus Probable
reserves of 52 MBOE. The well offsets a Nuvista-operated Bluesky gas well that produced at a stable rate of ~110
Mcf/d in July 2010 and has produced 1.4 Bcf since 1999. Daylight estimates $103,000 of capital is required to tie
the well into third party facilities. The Daylight operated 200/a-032-C 094-H-06 Bluesky gas well last produced 73
Mcf/d in January 2010 prior to being shut-in; the well has produced 692 MMcf since 2002. There are no reserves
assigned to this well.
                                                       Wargen Opportunity List
                                                                                          W.I.                         Proved plus Probable
                                                                                  W.I.   Capital   Reserves     Gas      Oil/NGL      Total Reserves
            Opportunity   Property    Operation              Zone                 (%)     (M$)     Category   (MMcf)     (Mbbl)          (MBOE)
00/C 002 F/094 H 06       Wargen     Equip & Tie in     Bluesky/Dunlevy          100%      103     Probable     278          6              52
                                                                                 TOTAL     103         1        278          6              52



                                                  Milo/Chinchaga Package 9 - 13

				
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