Palliser Oil & Gas Corporation Reports 2013 Year End Reserves, Operations Update, and Corporate Update

Palliser Oil & Gas Corporation Reports 2013 Year End Reserves, Operations 
Update, and Corporate Update 
/NOT FOR DISTRIBUTION IN THE UNITED STATES NEWSWIRE SERVICES OR FOR 
DISSEMINATION IN THE UNITED STATES/ 
CALGARY, Feb. 25, 2014 /CNW/ - Palliser Oil & Gas Corporation ("Palliser" or 
the "Company") (TSXV: PXL) would like to provide information on its oil and 
gas reserves as of December 31, 2013 and an operations and corporate update. 
Highlights of Palliser's Year End 2013 Reserves are as follows: 


        --  Generated one and four year average total proved plus probable
            finding, development and acquisition ("FD&A") costs of $24.90
            and $22.45 respectively per boe including changes in future
            development capital ("FDC"); and
        --  Increased corporate proved and probable reserves by 19 percent
            from 7,921 Mboe at December 31, 2012 to 9,410 Mboe at December
            31, 2013, replacing 274% of the Company's 2013 production.

Reserves Summary

Palliser's reserves have been independently evaluated by the Corporation's 
independent reserve engineering firm, Sproule Unconventional Limited 
("Sproule").  The reserves were evaluated in accordance with National 
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 
51-101") and the Canadian Oil and Gas Evaluation Handbook (""COGEH"") reserves 
definitions.

Reserves and Net Present Value (Forecast Prices and Costs)

The following tables summarize Palliser's remaining gross interest reserve 
volumes along with the value of future net revenue utilizing Sproule's 
forecast pricing and cost estimates as at December 31, 2013.
                                                             
    Reserves                                                 
                                Oil & NGL       Gas         BOE
                               Gross  Net  Gross Net  Gross  Net
    December 31, 2013          Mbbls Mbbls MMcf  MMcf Mboe  Mboe
    Proved                                                       
      Producing                1,746 1,382   468  446 1,834 1,466
      Non-producing            1,149   887     -    - 1,149   887
      Undeveloped              2,058 2,064     -    - 2,508 2,064
    Total proved               5,402 4,332   468  446 5,491 4,416
      Probable                 3,903 3,070    97   92 3,919 3,085
    Total proved plus probable 9,306 7,402   565  539 9,410 7,502
                                                               
    Net present value of future net revenue                    
                                            Present value ($000's)(1)
     
                                               discounted at rate of
    December 31, 2013                             0%       5%      10%
    Proved                                                            
      Producing                              $45,378  $41,735  $38,786
      Non-producing                           30,390   22,019   16,537
      Undeveloped                             46,891   38,313   31,595
    Total proved                             122,659  102,066   86,918
    Probable                                 101,539   80,870   66,343
    Total proved plus probable              $224,198 $182,936 $153,261
    (1) Values shown are calculated on a before tax basis

Pricing Assumptions

The following benchmark prices, inflation rates and exchange rates were used 
by Sproule for the forecast price and cost evaluation effective December 31, 
2013.
                                                          
                 WTI   WCS 20.5 API Exchange  AECO Spot      Rate
    Year     US $/bbl    CDN $/bbl     Rate  Cdn $/MMbtu  % / year
                                                          
    2014       94.65        77.81      0.94       4.00       1.5%
    2015       88.37        75.02      0.94       3.99       1.5%
    2016       84.25        75.29      0.94       4.00       1.5%
    2017       95.52        85.36      0.94       4.93       1.5%
    2018       96.96        86.64      0.94       5.01       1.5%
    2019       98.41        87.94      0.94       5.09       1.5%
    2020       99.89        89.26      0.94       5.18       1.5%
    2021       101.38       90.60      0.94       5.26       1.5%
    2022       102.91       91.96      0.94       5.35       1.5%
    2023       104.45       93.34      0.94       5.43       1.5%
    2024+   +1.5%/year  +1.5%/year     0.94  +1.5%/year  +1.5%/year

Crude oil price is WTI at Cushing, Oklahoma, natural gas is the AECO spot price

Reserves Reconciliation

The following table is a reconciliation of Palliser's gross interest reserves 
at December 31, 2013 and December 31, 2012 using Sproule's forecast pricing 
and cost estimates as at December 31, 2013 and December 31, 2012.
                                                                               
                  Heavy Oil (Mbbl) (3)    Natural Gas( MMcf)           BOE (Mboe)
    Reserves    Proved Probable  Total  Proved Probable Total Proved Probable  Total
                                                                               
    December     5,460    2,310   7,771    712      187   898  5,579    2,342   7,921
    31, 2012
    Additions    1,438    1,995   3,433      0        0     0  1,438    1,995   3,433
    (1)
    Revisions    (644)    (402) (1,046)  (172)     (90) (262)  (674)    (418) (1,092)
    (2)
    Acquistions    -        -       -      -        -      -     -        -       -
                 6,254    3,903  10,158    540       97   636  6,343    3,919  10,262
    Production   (841)      -     (841)   (72)      -    (72)  (853)      -     (853)
                                                                               
    December     5,412    3,903   9,316    468       97   565  5,491    3,919   9,410
    31, 2013
    (1)  Additions include discoveries, extensions, infill drilling and
         improved recovery
    (2)  Technical revisions include technical revisions and economic
         factors
    (3)  Heavy Oil also includes a very small component of light/medium oil
         and natural gas liquids

Finding, Development and Acquisition Costs

The following table summarizes Palliser's finding, development and acquisition 
costs for the years ended December 31, 2013, 2012, 2011 and 2010 including 
future development costs.
                                                                 
                          2013       2012       2011       2010 2010 - 2014
    Proved                                                       
    Capital           $ 24,991  $ 42,449   $ 44,042   $ 13,596   $
    expenditures                                                  125,077
    FDC - opening     $ 36,690  $   9,954  $   9,165  $   4,048  $
    balance(1)                                                        4,048
    FDC - closing     $ 47,939  $ 36,690   $   9,954  $   9,165  $
    balance                                                         47,939
    FDC -             $ 11,249  $ 26,736   $          $   5,117  $
    change                                     789                  43,891
    Capital                                                      
    expenditures
      including FDC   $ 36,240  $ 69,185   $ 44,831   $ 18,713   $
    change                                                        168,968
                                                                 
    Reserves               765      4,594        912        882       7,153
    additions
                                                                 
    FD&A (before      $         $          $   48.29  $   15.41  $
    FDC)               32.67       9.24                               17.49
    FD&A (after FDC)  $         $   15.06  $   49.16  $   21.22  $
                       47.37                                          23.62
                                                                 
    Proved plus                                                  
    probable
    Capital           $ 24,991  $ 42,449   $ 44,042   $ 13,596   $
    expenditures                                                  125,077
    FDC - opening     $ 40,728  $ 22,793   $ 15,965   $   7,441  $
    balance                                                           7,441
    FDC - closing     $ 74,059  $ 40,728   $ 22,793   $ 15,965   $
    balance                                                         74,059
    FDC -             $ 33,331  $ 17,935   $   6,828  $   8,524  $
    change                                                          66,618
    Capital                                                      
    expenditures
      including FDC   $ 58,322  $ 60,384   $ 50,870   $ 22,120   $
    change                                                        191,695
                                                                 
    Reserves             2,342      4,782      1,413      1,813       8,537
    additions
                                                                 
    FD&A (before      $         $          $   31.17  $          $
    FDC)               10.67       8.88                  7.50         14.65
    FD&A (after FDC)  $         $   12.63  $   36.00  $   12.20  $
                       24.90                                          22.45
                                                                 
    Operating         $         $   28.69  $   18.03  $   22.03  $
    netback            20.36                                          22.77
    Recycle ratio          1.9        3.2        0.6        2.9         1.6
    (before FDC)
    Recycle ratio          0.8        2.3        0.5        1.8         1.0
    (after FDC)
    (1) Future capital expenditures required to convert proved
        non-producing and probable reserves into proved producing

Undeveloped Land

The following table summarizes Palliser's undeveloped land holdings and the 
fair value of those landholdings, as at December 31, 2013 and 2012:
                                                       
                                       2013          2012
    Acres                        Gross    Net  Gross    Net
                                                          
    Alberta                      35,984 28,109 53,231 45,264
    Saskatchewan                 20,232 20,031 19,090 18,880
    Total                        56,216 48,140 72,321 64,144
    Average working interest               86%           89%

Net Asset Value
                                                          
    Reserve value ($000)                            2013     2012
    Proved + probable  (1)                      $153,261 $126,820
      Add: land value(2)                          11,090   10,860
      Seismic(2)                                   1,350    1,350
      Working capital (net debt)  (3)           (47,365) (37,345)
    Net asset value                             $118,336 $101,685
    Year end shares outstanding (000's)           63,916   58,916
    Net asset value per share - basic              $1.85    $1.73
    Fully diluted shares outstanding              64,754   64,432
    Net asset value per share - fully diluted      $1.83    $1.66
    (1) Present value discount 10% before taxes.
    (2) Valuation is based on management's estimation of fair market
        value.  Land value assumes $300 per acre for undeveloped heavy oil
        acreage with no booked reserves and $100 per acre for natural gas
        acreage with no booked reserves.
    (3) Working capital (net debt) for 2013 is unaudited and subject to
        change,  Working capital (net debt) is a non-IFRS measure
        representing the total bank loan, accounts payable and accrued
        liabilities, less accounts receivable, deposits and prepaid
        expenses.

Reserve Life Index ("RLI")

The reserve life index has been calculated based on year end reserves divided 
by fourth quarter 2013 average production of 2,040 boe per day.
                                                                 
                                                         Proved Proved plus
                                                                   probable
    Total Company interest reserves (Mboe)                5,491       9,410
    Fourth quarter 2013 production average (boe/d)        2,040       2,040
    RLI based on fourth quarter 2013 production average     7.4        12.6
    (years)

Operations Update

Palliser achieved production of 2,037 boe/d (99% oil weighting) during the 
fourth quarter of 2013.  The capital program for 2013 amounted to $25.0 
million and the Company exited 2013 with net debt of $47.4 million (production 
and financial amounts are unaudited and subject to change).

Production in the first quarter of 2014 is forecasted to average 1,800 to 
1,900 boe/d.  Capital expenditures in the first quarter are forecast to be 
limited to approximately $2 million, and funds flow from operating activities 
will be negatively impacted by an increase in propane costs, resulting in 
increased operating costs and lower operating netbacks.  The Company is 
forecasting net debt of approximately $49 million at the end of the first 
quarter.

Corporate Update

The Company's producing base, inventory of over 160 heavy oil locations, 9 
salt water disposal facilities, in combination with the capacity to ship up to 
75% of our product by rail, provides a platform for significant future growth.

Given Palliser's current financial position, the Company is examining any and 
all avenues to further improve the interests of shareholders.  Options being 
examined include joint ventures, corporate combinations, asset sales and 
financing options.

The Company also announces that Allan Carswell, President, COO, and a director 
of the Company, has left his positions with Palliser on mutually agreed upon 
terms.  The Board of Directors wishes Mr. Carswell success in his future 
endeavors and thanks him for his contributions to the Company.

Kevin Gibson will be assuming the responsibilities as President of the Company 
in addition to his current role as CEO.

Palliser is a Calgary-based emerging junior oil and gas company currently 
focused on heavy oil production in the greater Lloydminster area of both 
Alberta and Saskatchewan. For further information regarding Palliser Oil & Gas 
Corporation, the reader is invited to visit the Company's website at 
www.palliserogc.com.

Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements or 
information (collectively "forward-looking statements") within the meaning of 
applicable securities legislation, including, but not limited to management's 
assessment of future plans and operations, including: commodity focus; 
drilling plans and potential locations; expected production levels; 
development plans; reserves growth; production and operating sales and 
expenses; reservoir characteristics; the results of applying certain 
operational development techniques; certain economic factors; and capital 
expenditures.  Forward-looking statements are typically identified by words 
such as "anticipate", "estimate", "expect", "forecast", "may", "will", 
"project" and similar words suggesting future events or performance or may be 
identified by reference to a future date. In addition, statements relating to 
oil and gas reserves and resources are deemed to be forward-looking statements 
as they involve the implied assessment, based on certain estimates and 
assumptions, that the reserves or resources described, as the case may be, 
exist in the quantities predicted or estimated and can be profitably produced 
in the future.  With respect to forward-looking statements herein, Palliser 
has made assumptions regarding, among other things; future capital expenditure 
levels; future oil and natural gas prices; "differentials" between West Texas 
Intermediate and Western Canadian Select benchmark pricing; future oil and 
natural gas production levels; future water disposal capacity; future exchange 
rates and interest rates; ability to obtain equipment and services in a timely 
manner to carry out development activities; ability to market oil and natural 
gas successfully to current and new customers; the impact of increasing 
competition; the ability to obtain financing on acceptable terms; and the 
ability to add production and reserves through development and exploitation 
activities. Although Palliser believes that the expectations reflected in the 
forward-looking statements contained herein, and the assumptions on which such 
forward-looking statements are made, are reasonable, there can be no assurance 
that such expectations will prove to be correct. Readers are cautioned not to 
place undue reliance on forward-looking statements included herein, as there 
can be no assurance that the plans, intentions or expectations upon which the 
forward-looking statements are based will occur. By their nature, 
forward-looking statements involve numerous risks and uncertainties that 
contribute to the possibility that the forward-looking statements will not 
occur, which may cause Palliser's actual performance and financial results in 
future periods to differ materially from any estimates or projections.  
Additional information on these and other factors that could affect Palliser's 
results are included in reports on file with Canadian securities regulatory 
authorities, including the Company's Annual Information Form, and may be 
accessed through the SEDAR website at www.sedar.com.

The forward-looking statements contained herein speak only as of the date 
hereof. Except as expressly required by applicable securities laws, Palliser 
does not undertake any obligation to, nor does it intend to, publicly update 
or revise any forward-looking statements, whether as a result of new 
information, future events or otherwise. The forward-looking statements 
contained herein are expressly qualified by this cautionary statement.  In 
addition, readers are cautioned that historical results are not necessarily 
indicative of future performance.

Production volumes are commonly expressed on a barrel of equivalent ("BOE") 
basis whereby natural gas volumes are converted at a ratio of six thousand 
cubic feet to one barrel of oil.  The intention is to convert oil and natural 
gas measurement units into one basis for improved analysis of results and 
comparisons with other industry participants. The term BOE may be misleading, 
particularly if used in isolation.  The conversion ratio is based on an energy 
equivalent method and does not represent an economic value equivalency at the 
wellhead.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that 
term is defined in the policies of the TSX Venture Exchange) accepts 
responsibility for the adequacy or accuracy of this Press release.



SOURCE  Palliser Oil & Gas Corporation 
Kevin J. Gibson President & CEO kgibson@palliserogc.com (403) 209-5717  or  
Ivan J. Condic Vice President, Finance and CFO icondic@palliserogc.com (403) 
209-5718   
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/25/c7331.html 
CO: Palliser Oil & Gas Corporation
ST: Alberta
NI: OIL FIELD  
-0- Feb/26/2014 03:12 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.