ENERGY TRUSTS / Shiningbank Energy Announces Significant
Reserve Increases
TSE SYMBOL: SHN.UN
FEBRUARY 19, 1998
CALGARY, ALBERTA--Shiningbank Energy Income Fund today announced
significant increases in its oil and gas reserves following the
results of its 1997 year-end reserves review by Paddock Lindstrom
& Associates Ltd.
Based on this report, Shiningbank achieved the following results
during 1997:
1. Established reserves (Proven plus 50 percent Probable) were
increased by 11.5 percent to 12.4 million barrels of oil
equivalent ("mmboe").
2. Reserve additions replaced 200 percent of 1997 production at a
cost of $6.25 per barrel of oil equivalent.
3. The Established Reserve Life Index has improved from 8.3 years
to 10.3 years, a 24 percent increase since the inception of the
Fund.
4. The present value of established reserves, evaluated at a
discount rate of 12 percent, increased to $86.4 million despite
lower commodity price forecasts.
The following tables summarize Shiningbank's reserve estimates at
December 31, 1997:
/T/
Crude Oil and NGLs Natural Gas Oil Equivalent
(mmbbl) (Bcf) (mmboe)
Proven 5,585 48.4 10,425
Probable 2,864 10.3 3,895
Total Proven plus
Probable 8,449 58.7 14,320
Established 7,017 53.6 12,372
Present Worth of December 31, 1997 December 31, 1996
Established Reserves
(pre-tax) ($ millions) ($ millions)
Undiscounted 179.5 139.9
Discounted at 10 percent 94.2 82.5
Discounted at 12 percent 86.4 76.3
Discounted at 15 percent 77.0 68.6
/T/
Acquisitions with effect January 1, 1998, but which have not yet
closed, will add a further 1.9 mmboe to the established reserves
at an aggregate cost of $4.47 per boe and will add production of
over 400 boe per day for 1998, principally long-life natural gas.
Including these 1998 acquisitions, Shiningbank estimates its Net
Asset Value to be $9.40 per unit.
These results support Shiningbank's belief that 1997 was another
year of strong growth in the Fund's asset base. The significant
increase in reserve life index, maintenance of a high Net Asset
Value per unit, replacement of twice our 1997 production with new
reserves at a favourable cost, and the payment of consistent,
high-yielding distributions of $1.60 per unit in 1997 confirm the
value of the Fund to its unitholders. Shiningbank has continued
the trend in 1998 with further acquisitions of natural gas
properties in west-central Alberta, its main operating area.
Shiningbank's strategy of operating its properties (currently
two-thirds operated), adding value through low-risk development of
its assets, maintaining significant exposure to natural gas (over
60 percent of production), and maintaining a healthy balance sheet
sets up the Fund for further growth in 1998 and 1999.
Shiningbank Energy Income Fund is a conventional oil and gas
royalty trust and units are listed on The Toronto Stock Exchange
under the symbol "SHN.UN". |
