UTS reserves update. UTS has 35% of 3.5bn bbls, or 1.23bn bbls.
With a market cap of C$2.8bn and $100m in cash, EV of 2.7/1.23 is C$2.20/bbl
Those are pretty expensive oil sands! They have some unexplored leases (and so do others) and they have a partnership with Teck and PCA (which should warrant a premium) but UTS is priced about 30-50% higher than most other oil sands plays on an EV/boe basis.
Putting it another way, in Dec 05, Scotia Capital estimated its 55% shares in Fort Hill would add $6.11 to PCA's share price, or approx C$325m.
UTS's $2.8bn market cap for its 35% share is a pricey way to play Fort Hills.
But, it has been a market darling and enjoys the support of some popular analysts.
UTS contingent bitumen resource estimates increase for 2005
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES/
TSX Trading Symbol: UTS
CALGARY, Feb. 23 /CNW/ - In order to comply with National Instrument
51-101, UTS Energy Corporation ("UTS") retained independent reserves
evaluators GLJ Petroleum Consultants Ltd. ("GLJ"), to conduct an independent
evaluation of UTS' interests in the Fort Hills oil sands leases 5, 8 and 52.
The report was prepared by GLJ for UTS on behalf of UTS in order to meet its
annual securities reporting requirements.
GLJ's "best estimate" of contingent recoverable bitumen resources
associated with the Fort Hills Project (the "Project") as of December 31, 2005
is 3.5 billion barrels compared to the best estimate of 2.4 billion barrels in
December 31, 2004. UTS has a 30% working interest in the Project and therefore
its corresponding proportion of contingent bitumen resources is estimated to
be 1.05 billion barrels, up from 0.72 billion barrels.
GLJ's results are summarized as follows: Bitumen Resources
December 2004 December 2005 Change
billion barrels billion barrels
Low Estimate 0.73 2.4 229%
Best Estimate 2.4 3.5 46%
High Estimate 3.0 4.6 53%
It should be noted that GLJ considers the marketable product from the
Project to be synthetic oil, and has prepared contingent resource estimates on
that basis. The December 31, 2005 recoverable bitumen estimates presented
above are provided for comparison purposes only, and require upgrading to
produce a marketable product.
The Low Estimate considers a portion of the existing mine plan, while the
High Estimate recognizes a 50% increase in the amount of bitumen feed to the
extraction facilities under a potential revised mine planning basis. The 50%
increase in volume reflects an approximation of the type of increase that the
Project would realize by increasing the total volume of material moved to
bitumen in-place (TV:BIP) component of the current regulatory operating
criteria from 12 to 16. As such, the 2005 report was not based on new
technical data, but rather a reassessment of the previous data in a different
commercial climate. The existing mine plan, which was developed in 2001-2002
by TrueNorth Energy Corporation, estimated the contingent resource to be
2.8 billion barrels. This plan was predicated on an oil price of $20 - $22 US
WTI. Accordingly, an updated mine plan is currently being developed by the
Fort Hills Partnership, with input from Teck Cominco Limited, which may well
result in further increases to the contingent resource. This plan will be
completed in the second quarter of 2006.
"Directionally, this increase was anticipated and is predominantly driven
by higher oil prices allowing the Project to mine additional resources
economically," said Dr. William Roach, President and Chief Executive Officer.
"It also should be noted that these estimates anticipate a - 2 - 30 revised
mine plan that is currently being prepared. Moreover, we believe the revised
mine plan may result in recoverable volume estimates greater than the
estimates given in the 2005 GLJ report subject to any additional required
regulatory approvals."
The Fort Hills Project is held by UTS with a 30% working interest, Teck
Cominco Limited with a 15% working interest and Petro-Canada with a
55% working interest and operatorship.
UTS Energy Corporation is based in Calgary, Alberta. The Company's common
shares (UTS) are traded on the Toronto Stock Exchange.
FORWARD-LOOKING STATEMENTS: Except for statements of historical fact
relating to the Company, this news release contains certain "forward-looking
statements" within the meaning of applicable securities law. Forward-looking
statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other similar
words, or statements that certain events or conditions "may" or "will" occur.
Forward-looking statements such as the references to anticipated contingent
resources, referenced in this news release are based on the opinions and
estimates of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those anticipated in the
forward-looking statements. The Company undertakes no obligation to update
forwardlooking statements if circumstances or management's estimates or
opinions should change except as required by law. The reader is cautioned not
to place undue reliance on forward looking statements.
For further information: Dr. William J. F. Roach, President and Chief
Executive Officer or Wayne I. Bobye, Vice-President and Chief Financial
Officer at (403) 538-7030. |
