CORP. / Amber Energy Reserves, Shareholder Rights Plan
AMBER ENERGY INC. ANNOUNCES ADDITION OF 69 MILLION BOE'S FROM FIRST
HALF 1998 DRILLING PROGRAM AND ADOPTION OF SHAREHOLDER RIGHTS PLAN
CALGARY, June 11 /CNW/ - Amber Energy Inc. (''Amber'') announces that the
Company's petroleum reserves have been evaluated as at May 31, 1998 by Outtrim
Szabo Associates Ltd., independent petroleum engineers, in their report dated
June 4, 1998 (the ''Outtrim Report''). Amber's successful 1998 drilling
program has resulted in the addition of 69 million Boe's of reserves on a
proved and probable basis.
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Reserves Reconciliation
Five months to May 31, 1998
(Before Crude Oil & Natural Gas
Royalties) NGLs (MMBbl) (Bcf)
------------------------------------------------------------------
Proved Probable Total Proved Probable Total
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At Nov 30/97 59.4 162.1 221.5 218.5 79.1 297.6
Discoveries 15.3 39.7 55.0 31.3 39.0 70.3
Acquisitions 0.0 0.0 0.0 0.0 0.0 0.0
Production (est) (2.9) - (2.9) (18.1) - (18.1)
Dispositions 0.0 0.0 0.0 0.0 0.0 0.0
Revisions /
Reclassifications 15.4 (9.6) 5.8 7.0 9.3 16.3
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At May 31/98 87.2 192.2 279.4 238.7 127.4 366.1
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(Before MMBoe
Royalties) (at 10:1)
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Proved Probable Total
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At Nov 30/97 81.3 170.0 251.3
Discoveries 18.4 43.6 62.0
Acquisitions 0.0 0.0 0.0
Production (est) (4.7) - (4.7)
Dispositions 0.0 0.0 0.0
Revisions /
Reclassifications 16.1 (8.7) 7.4
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At May 31/98 111.1 204.9 316.0
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Reserves Volumes
As at May 31, 1998
Company's Share of Remaining Reserves
(Before Royalties)
-----------------------------------------------------
Crude Oil & NGLs Natural Gas MMBoe
MMBbl Bcf (at 10:1)
May Nov May Nov May Nov
31/98 30/97 31/98 30/97 31/98 30/97
------------------------------------------------------------------------
Proved Developed 33.4 18.4 199.0 198.7 53.3 38.3
Proved Undeveloped 53.8 41.0 39.7 19.8 57.8 43.0
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Total Proved 87.2 59.4 238.7 218.5 111.1 81.3
Probable Additional 192.2 162.1 127.4 79.1 204.9 170.0
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Total Proved &
Probable 279.4 221.5 366.1 297.6 316.0 251.3
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Proved &
50% Probable 183.3 140.5 302.4 258.1 213.6 166.3
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Present Value of Estimated Future Net Revenue Before Tax
as at May 31, 1998 ($ Millions)
Discounted at
--------------------------------------
Undiscounted 10% 15%
May Nov May Nov May Nov
31/98 30/97 31/98 30/97 31/98 30/97
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Proved Developed 754.8 486.9 412.4 308.1 344.8 264.2
Proved Undeveloped 616.2 375.8 229.8 184.0 259.1 133.7
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Total Proved 1,371.0 862.7 642.2 492.1 503.9 397.9
Probable
Additional 3,522.4 2,285.5 943.0 989.1 674.8 725.0
------------------------------------------------------------------------
Total Proved &
Probable 4,893.4 3,148.2 1,585.2 1,481.2 1,178.7 1,122.9
------------------------------------------------------------------------
Proved &
50% Probable 3,132.2 2,005.5 1,113.7 986.7 841.3 760.4
------------------------------------------------------------------------
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The Outtrim Report includes the present value of Amber's estimated future
net revenue, which is based upon Outtrim Szabo's forecast for commodity
prices. Due to the recent drop in crude oil prices, Outtrim Szabo has
adjusted its oil price forecast since its November 30, 1997 report as follows:
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Outtrim Szabo Associates Ltd.
Oil Price Forecast
WTI at Edmonton Oil Heavy Oil
Cushing Price D2S2 25 degree API Hardisty
Year May 31/98 Nov 30/97 May 31/98 Nov 30/97 May 31/98 Nov 30/97
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US$/Bbl $/Bbl $/Bbl
1998 16.75 20.71 22.61 27.74 14.13 19.98
1999 18.19 21.33 24.44 28.37 15.88 21.00
2000 19.70 21.97 26.32 29.02 17.77 22.06
2001 21.00 21.63 27.89 29.68 19.53 23.15
2002 22.08 23.32 29.14 30.36 21.12 24.29
2003 22.63 24.02 29.87 31.28 22.40 25.65
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Pelican Lake Update
Amber owns 305.7 net contiguous sections of Alberta Crown Oil Sands
Development Leases in the Pelican Lake area. To date, Amber has drilled 137
producing horizontal oil wells (100% success rate) and 45 vertical
stratigraphic test wells at Pelican Lake. As at May 31, 1998, the Outtrim
Report assigned 79.8 million proved barrels and 137.2 million probable
additional barrels of oil reserves and 26.0 billion cubic feet of proved
natural gas and 63.3 billion cubic feet of probable additional natural gas,
all under primary recovery at Pelican Lake. On primary recovery alone, the
Outtrim Report estimates that the total incremental capital expenditures
required to fully develop these Pelican Lake reserves will be $413.8 million.
To May 31, 1998, Amber had spent $324 million in capital costs on the Pelican
Lake project, including land, drilling, completions, facilities and the
Pelican Lake Pipeline. Amber total oil production to May 31, 1998 from
Pelican Lake was 3.0 million barrels. Based on the current reserves assigned
and capital expenditure forecasts, total finding and development costs for the
Pelican Lake Project under primary recovery are expected to be $3.35 per
barrel.
An additional 51.3 million barrels of probable reserves were assigned to
a portion of Amber's lands in the Outtrim Report as secondary waterflood
recoverable reserves. In 1997, Amber contracted Petroleum Recovery Institute
(''PRI'') to perform a detailed reservoir study to assess secondary recovery
schemes including downspacing and waterflooding of the Pelican Lake oil field.
The PRI Report will be completed this summer and Amber has already initiated a
field pilot project with water injection to begin in early 1999.
Adoption of Shareholder Rights Plan
Amber also announces the adoption by the board of directors of the
Corporation today of a shareholder protection rights plan (the ''Plan''). The
Plan is intended to address deficiencies which the Corporation believes exist
in current take-over bid legislation. In particular, the Plan is intended to
afford the board of directors with additional time to evaluate any offer and
to explore, develop and pursue alternatives to assure full value for
shareholders. Further, the Plan is intended to assist in ensuring that all
shareholders of the Corporation have an equal opportunity to participate in
any take-over bid. Neither the board of directors nor management of the
Corporation is aware of any interest by any third party in acquiring control
of the Corporation.
Upon the occurrence of certain triggering events (including the
acquisition by a person or group of 20% or more of the outstanding common
shares of the Corporation), the rights effectively entitle shareholders (other
than the acquiring person or group) to acquire common shares of the
Corporation at half of the market price. However, the Plan is not intended to
discourage take-over bids and is less restrictive than many recently announced
rights plans. The rights are not triggered by purchases of common shares of
the Corporation made pursuant to a permitted bid, which is defined as a
take-over bid made to all holders of common shares of the Corporation under
which no shares may be purchased prior to the 30th business day following the
date of the bid and which is conditional on not less than 50% of the common
shares of the Corporation (other than those owned by the acquiring person or
group) accepting the bid.
The Plan is effective immediately and the Corporation intends to submit
the Plan for shareholder ratification at a meeting of shareholders of the
Corporation anticipated to be held later in 1998.
The Plan is subject to receipt of certain regulatory approvals and is
being filed, in its entirety, with material change reports being filed with
provincial securities commissions.
This press release contains forward-looking statements that are subject
to risk factors associated with the oil and gas business. The Company believes
that the expectations reflected in this release are reasonable, but results
may be affected by a variety of variables including, but not limited to, price
fluctuations, currency fluctuations, industry competition, environmental
risks, political risks and capital restrictions.
Amber is an independent Canadian oil and gas exploration, development and
production company with common shares trading on The Toronto Stock Exchange
and The Alberta Stock Exchange under the symbol AMB.
-30-
For further information: Richard Lewanski, President & CEO; James C.
(Pep) Lough, Vice President Finance & CFO, (403) 237-9977, Fax: (403) 9970,
www.amber-energy.com
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