Crew Energy Announces Closing the Acquisition of British Columbia Montney Acreage

Crew Energy Announces Closing the Acquisition of British Columbia Montney 
Acreage 
CALGARY, ALBERTA -- (Marketwired) -- 07/09/13 --  
Crew Energy Inc. ("Crew" or the "Company") (TSX:CR) of Calgary,
Alberta is pleased to announce that it has closed the acquisition of
the third tranche of Montney acreage in British Columbia for a
purchase price of $35.2 million.  
Third Tranche Highlights 


 
--  Acquisition of 81 sections of highly prospective Montney acreage
    proximate to Crew's existing 292 sections. 
--  The 18 section portion in the Altares area, as evaluated by Sproule
    Associates Ltd. ("Sproule") effective May 31, 2013, has a proved and
    proved plus probable reserve assignment of 2.0 mmboe and 7.6 mmboe,
    respectively.  
--  The net present value of the reserves at Altares discounted at 10% is
    $19.4 million for the proved reserves and $76.6 million for the proved
    plus probable reserves. 
--  An updated post acquisition independent resource evaluation by Sproule
    assigns a Total Petroleum Initially in Place ("TPIIP") of 91 TCFE on
    Crew's aggregated northeast British Columbia Montney acreage, up from
    the previously announced 76 TCFE.

 
OVERVIEW 
The closing of the third tranche of Crew's Montney acquisition is
consistent with the Company's consolidation efforts in the Greater
Septimus area and continues to build on Crew's significant Montney
position. The strategic location and importance of this world class
Montney play positions Crew for a methodical exploitation of this
resource over the next five to ten years. An updated map of the
Company's Montney acreage is posted on the Company's website at
www.crewenergy.com. 
MONTNEY RESOURCE EVALUATION 
The following discussion is subject to a number of cautionary
statements, assumptions and risks as set forth therein. See
"Information Regarding Disclosure on Oil and Gas Reserves, Resources
and Operational Information" for additional cautionary language,
explanations and discussion and "Forward Looking Information and
Statements" for a statement of principal assumptions and risks that
may apply. See also "Definitions of Oil and Gas Resources and
Reserves". The discussion includes reference to TPIIP, DPIIP, UPIIP
and Contingent Resources per the Sproule Associates Ltd. ("Spro
ule")
Resources Evaluation effective as at May 1, 2013, prepared in
accordance with the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook"). Unless indicated otherwise in this news release, all
references to Contingent Resource volumes are Best Estimate
Contingent Resource volumes. 
Sproule was engaged to conduct an updated independent Montney
Resource Evaluation of Crew's 373 net Montney sections located in
Northeast British Columbia ("NEBC"). The update includes the third
tranche of Crew's acquired lands (the "Acquisition Lands") effective
as of May 1, 2013 as well as Crew's previous Montney Resource
Evaluation announced on May 13, 2013 (collectively, the "Resource
Evaluation"). The Resource Evaluation confirms the development and
resource potential on 100 percent of Crew's Montney land base.  
The following tables summarize the results of the updated Resource
Evaluation including the third tranche of the Acquisition Lands: 


 
----------------------------------------------------------------
Natural Gas Resource Categories (1)(2)                       Tcf
----------------------------------------------------------------
----------------------------------------------------------------
                                                                
Total Petroleum Initially In Place (TPIIP)                  44.6
DiscoverPetroleum Initially In Place (DPIIP)ed              15.8
Undiscovered Petroleum Initially In Place (UPIIP)           28.8
----------------------------------------------------------------

 
(1) All volumes in table are company gross and raw gas volumes. 
(2) Sproule's analysis identified four intervals in the Montney
consisting of one interval in the Upper Montney and three intervals
in the Lower Montney. 


 
----------------------------------------------------------------
Oil Resource Categories (1)(2)(3)                         Mmbbls
----------------------------------------------------------------
----------------------------------------------------------------
                                                                
Total Petroleum Initially In Place (TPIIP)               7,812.5
Discovered Petroleum Initially In Place (DPIIP)            880.0
Undiscovered Petroleum Initially In Place (UPIIP)        6,932.5
----------------------------------------------------------------

 
(1) All volumes in table are company gross. 
(2) The oil volumes are quoted as Stock Tank Barrels ("STB").  
(3) Sproule's analysis identified four intervals in the Montney
consisting of one interval in the Upper Montney and three intervals
in the Lower Montney. 


 
----------------------------------------------------------------
                                                            Best
Reserves and Contingent Resources (1)(2)                Estimate
----------------------------------------------------------------
----------------------------------------------------------------
                                                                
Natural Gas (Tcf)                                               
Reserves (3)                                                 0.3
Contingent Resources (6)                                     3.2
----------------------------------------------------------------
                                                                
Natural Gas Liquids (mmbbls) (4)(5)                             
Reserves (3)                                                 8.7
Contingent Resources (6)                                   142.5
----------------------------------------------------------------
                                                                
Oil (mmbbls)                                                    
Reserves (3)                                                 0.3
Contingent Resources                                         7.7
----------------------------------------------------------------

 
(1) All DPIIP other than cumulative production, reserves, and
Contingent Resources has been categorized as unrecoverable at this
time. 
(2) All volumes in table are company gross and sales volumes. 
(3) For reserves, the volume under the heading Best Estimate are
proved plus probable reserves. The third tranche acquisition
effective May 31, 2013 was added to the previously disclosed reserves
evaluated at December 31, 2012. 
(4) The liquid yields are based on average yield over the producing
life of the property. 
(5) Liquid yields are unique to each area. They are estimated based
on gas composition of gas samples in the area and expected plant
recoveries. 
(6) Project economic Status is currently undetermined. There is no
certainty that it will be commercially viable to produce any of the
resources. 


 
----------------------------------------------------------------
                                                            Best
Prospective Resources (1)(2)                            Estimate
----------------------------------------------------------------
----------------------------------------------------------------
                                                                
Natural gas (Tcf)                                            4.2
Natural gas liquids (mmbbls)                       
        174.6
Oil (mmbbls)                                                17.8
----------------------------------------------------------------

 
(1) All UPIIP other than Prospective Resources has been categorized
as unrecoverable at this time.  
(2) All volumes in table are company gross and sales volumes. 
Based upon the foregoing analysis and Crew's expertise in the Montney
formation in NEBC, it is expected that significant additional
reserves will be developed in the future with continued drilling
success on currently undeveloped Montney acreage together with
further development, completion refinements and improved economic
conditions. Additional drilling, completion, and test results are
required before Crew can commit to development and these contingent
resources can be converted to reserves and a larger component of
Prospective Resources is converted to Contingent Resource. 
Definitions of Oil and Gas Resources and Reserves 
Reserves are estimated remaining quantities of oil and natural gas
and related substances anticipated to be recoverable from known
accumulations, as of a given date, based on the analysis of drilling,
geological, geophysical and engineering data; the use of established
technology; and specified economic conditions, which are generally
accepted as being reasonable. Reserves are classified according to
the degree of certainty associated with the estimates as follows: 
Proved Reserves are those reserves that can be estimated with a high
degree of certainty to be recoverable. It is likely that the actual
remaining quantities recovered will exceed the estimated proved
reserves. 
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 plus probable reserves.  
Possible Reserves are those additional reserves that are less certain
to be recovered than probable reserves. It is unlikely that the
actual remaining quantities recovered will exceed the sum of the
estimated proved plus probable plus possible reserves. 
Cumulative Production is the cumulative quantity of petroleum that
has been recovered at a given date.  
Resources encompasses all petroleum quantities that originally
existed on or within the earth's crust in naturally occurring
accumulations, including Discovered and Undiscovered (recoverable and
unrecoverable) plus quantities already produced. "Total resources" is
equivalent to "Total Petroleum Initially-In-Place". Resources are
classified in the following categories:  
Total Petroleum Initially-In-Place ("TPIIP") is that quantity of
petroleum that is estimated to exist originally in naturally
occurring accumulations. It includes that quantity of petroleum that
is estimated, as of a given date, to be contained in known
accumulations, prior to production, plus those estimated quantities
in accumulations yet to be discovered. 
Discovered Petroleum Initially-In-Place ("DPIIP") is that quantity of
petroleum that is estimated, as of a given date, to be contained in
known accumulations prior to production. The recoverable portion of
discovered petroleum initially in place includes production,
reserves, and contingent resources; the remainder is unrecoverable. 
Contingent Resources are 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 such factors 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. 
Undiscovered Petroleum Initially-In-Place ("UPIIP") is that quantity
of petroleum that is estimated, on a given date, to be contained in
accumulations yet to be discovered. The recoverable portion of
undiscovered petroleum initially in place is referred to as
"prospective resources" and the remainder as "unrecoverable." 
Prospective Resources are those quantities of petroleum estimated, as
of a given date, to be potentially recoverable from undiscovered
accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery and
a chance of development. 
Unrecoverable is that portion of DPIIP and UPIIP quantities which is
estimated, as of a given date, not to be recoverable by future
development projects. A portion of these quantities may become
recoverable in the future as commercial circumstances change or
technological developments occur; the remaining portion may never be
recovered due to the physical/chemical constraints represented by
subsurface interaction of fluids and reservoir rocks. 
Uncertainty Ranges are described by the Canadian Oil and Gas
Evaluation Handbook as low, best, and high estimates for reserves and
resources. The Best Estimate is 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 at least a 50 percent probability (P50) that the quantities
actually recovered will equal or exceed the best estimate. 
Information Regarding Disclosure on Oil and Gas Reserves, Resources
and Operational Information 
All amounts in this news release are stated in Canadian dollars
unless otherwise specified. Throughout this press release, the terms
Boe (barrels of oil equivalent), Mmboe (millions of barrels of oil
equivalent), and Tcfe (trillion cubic feet of gas equivalent) are
used. Such terms when used in isolation, may be misleading. Where
applicable, natural gas has been converted to barrels of oil
equivalent ("BOE") based on 6 Mcf:1 BOE and oil and liquids have been
converted to natural gas equivalent on the basis of 1 bbl:6 mcfe. The
BOE rate is based on an energy equivalent conversion method primarily
applicable at the burner tip, and given that the value ratio based on
the current price of crude oil as compared to natural gas is
significantly different than the energy equivalency of the 6:1
conversion ratio, utilizing the 6:1 conversion ratio may be
misleading as an indication of value. The BOE rate is based on an
energy equivalent conversion method primarily applicable at the
burner tip and does not represent a value equivalent at the wellhead.
In accordance with Canadian practice, production volumes and revenues
are reported on a company gross basis, before deduction of Crown and
other royalties, unless otherwise stated. Unless otherwise specified,
all reserves volumes and net present value of reserves in this news
release (and all information derived therefrom) are based on "company
gross reserves" using forecast prices and costs. Our oil and gas
reserves statement for the year-ended December 31, 2012 includes
complete disclosure of our oil and gas reserves and other oil and gas
information in accordance with NI 51-101, and is contained within our
Annual Information Form which is available on our SEDAR profile at
www.sedar.com. 
Thi
s news release contains references to estimates of oil and gas
classified as TPIIP and DPIIP in the Montney region in northeastern
British Columbia which are not, and should not be confused with, oil
and gas reserves. See "Definitions of Oil and Gas Resources and
Reserves". TPIIP, DPIIP and UPIIP have been estimated using a zero
percent porosity cutoff. 
Projects have not been defined to develop the resources in the
Evaluated Areas as at the evaluation date. Such projects, in the case
of the Montney resource development, have historically been developed
sequentially over a number of drilling seasons and are subject to
annual budget constraints, Crew's policy of orderly development on a
staged basis, the timing of the growth of third party infrastructure,
the short and long-term view of Crew on gas prices, the results of
exploration and development activities of Crew and others in the area
and possible infrastructure capacity constraints. As with any
resource estimates, the evaluation will change over time as new
information becomes available. 
Prospective Resources have not been risked for chance of discovery.
There is no certainty that any portion of the Prospective Resources
will be discovered. The Prospective and Contingent Resources have not
been risked for chance of development. There is no certainty that it
will be commercially viable to produce any portion of the Prospective
(if discovered) or Contingent Resources. The Contingent Resource
contingencies are identified as economic or non-technical, there are
no technical contingencies. Significant positive factors are historic
drilling success and production history on the more fully developed
Montney acreage, abundant well log and production test data.
Potential negative factors include lack of long term production
history over the majority of Crew lands, lack of infrastructure,
potential for variations in the quality of the Montney formation
where minimal well data currently exists, access to the substantial
amount of capital which would be required to develop the resources,
low commodity prices that would curtail the economics of development
and the future performance of wells, regulatory approvals, access to
the required services at the appropriate cost and topographic or
surface restrictions. 
Crew's belief that it will establish significant additional reserves
over time with the conversion of Prospective Resource into Contingent
Resource, Contingent Resource into probable reserves and probable
reserves into proved reserves is a forward looking statement and is
based on certain assumptions and is subject to certain risks, as
discussed below under the heading "Forward Looking Information and
Statements". 
Cautionary Statements 
Forward-Looking Information and Statements 
This news release contains certain forward-looking information and
statements within the meaning of applicable securities laws. The use
of any of the words "expect", "anticipate", "continue", "estimate",
"may", "will", "project", "should", "believe", "plans", "intends"
"forecast" and similar expressions are intended to identify
forward-looking information or statements. In particular, but without
limiting the foregoing, this news release contains forward-looking
information and statements pertaining to the following: the volume
and product mix of Crew's oil and gas production; the recognition of
significant resources under the heading "Montney Resource
Evaluation"; future oil and natural gas prices and Crew's commodity
risk management programs; future liquidity and financial capacity;
future results from operations; the total future capital associated
with development of reserves and resources; and methods of funding
our capital program.  
Forward-looking statements or information are based on a number of
material factors, expectations or assumptions of Crew which have been
used to develop such statements and information but which may prove
to be incorrect. Although Crew believes that the expectations
reflected in such forward-looking statements or information are
reasonable, undue reliance should not be placed on forward-looking
statements because Crew can give no assurance that such expectations
will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been
made regarding, among other things: the impact of increasing
competition; the general stability of the economic and political
environment in which Crew operates; the timely receipt of any
required regulatory approvals; the ability of Crew to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of
the projects in which Crew has an interest in to operate the field in
a safe, efficient and effective manner; the ability of Crew to obtain
financing on acceptable terms; field production rates and decline
rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development and exploration; the timing and cost
of pipeline, storage and facility construction and expansion and the
ability of Crew to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; regulatory
framework regarding royalties, taxes and environmental matters in the
jurisdictions in which Crew operates; the ability of Crew to
successfully market its oil and natural gas products. There are a
number of assumptions associated with the potential of resource
volumes assigned to the Evaluated Areas including the quality of the
Montney reservoir, future drilling programs, continued performance
from existing wells and performance of new wells, the growth of
infrastructure, well density per section, and recovery factors and
discovery and development necessarily involves known and unknown
risks and uncertainties, including those identified in this press
release.  
The forward-looking information and statements included in this news
release are not guarantees of future performance and should not be
unduly relied upon. Such information and statements, including the
assumptions made in respect thereof, involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to defer materially from those anticipated in such
forward-looking information or statements including, without
limitation: changes in commodity prices; the early stage of
development of some areas in the Evaluated Areas; the potential for
variation in the quality of the Montney formation; changes in the
demand for or supply of Crew's products; unanticipated operating
results or production declines; changes in tax or environmental laws,
royalty rates or other regulatory matters; changes in development
plans of Crew or by third party operators of Crew's properties,
increased debt levels or debt service requirements; inaccurate
estimation of Crew's oil and gas reserve and resource volumes;
limited, unfavourable or a lack of access to capital markets;
increased costs; a lack of adequate insurance coverage; the impact of
competitors; and certain other risks detailed from time-to-time in
Crew's public disclosure documents (including, without limitation,
those risks identified in this news release and Crew's Annual
Information Form). 
The forward-looking information and statements contained in this news
release speak only as of the date of this news release, and Crew does
not assume any obligation to publicly update or revise any of the
included forward-looking statements or information, whether as a
result of new information, future events or otherwise, except as may
be required by applicable securities laws. 
Crew is an oil and gas exploration and production company whose
shares are traded on The Toronto Stock Exchange under the trading
symbol "CR".
Contacts:
Crew Energy Inc.
Dale Shwed
President and C.E.O.
(403) 231-8850
dale.shwed@crewenergy.com 
Crew Energy Inc.
John Leach
Senior Vice President and C.F.O.
(403) 231-8859
john.leach@crewenergy.com 
C
rew Energy Inc.
Rob Morgan
Senior Vice President and C.O.O.
(403) 513-9628
rob.morgan@crewenergy.com
www.crewenergy.com
 
 
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