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Corporate Reserves

Significant Reserves Highlights for 2015

NuVista is pleased to announce a significant increase in our reserves as a result of the 2015 year end independent reserves evaluation by GLJ Petroleum Consultants Ltd ("GLJ") (the "GLJ Report"). The Wapiti Montney play continues to exceed expectations as our flagship play with line-of-sight to exceptional organic production, reserves, and value growth for shareholders for many years. For the year ended December 31, 2015 NuVista:

  • Increased proved developed producing reserves ("PDP") by 13% to 37.4MMBoe, replacing 1.6x production. The Montney PDP well count increased by 53% to 52 wells over year end 2014;
  • Increased proved plus probable reserves ("TP+PA") by 15% to 253 MMBoe and total proved reserves ("TP") by 6% to 118 MMBoe as compared to year end 2014;
  • Montney TP+PA average reserves per well increased 4% as compared to the 2014 average, while future development capital ("FDC") per well decreased 19%;
  • Increased Montney TP+PA well locations to 253, an increase of 23% compared to year end 2014;
  • Achieved 2015 corporate finding and development ("F&D") costs of $3.69/Boe on a TP+PA basis, including changes in FDC, which generated a 4.1x recycle ratio(1);
  • Delivered PDP F&D costs of $20.56/Boe, or $13.54/Boe after excluding $93 million of capital which was spent on major facilities expansions underpinning long term Montney infrastructure growth. No major facility spending is planned for 2016 or 2017 at this time;
  • Increased condensate reserves versus the prior year by 16% on a TP+PA basis to 51.9 MMBoe. Condensate volumes now represent 21% of total TP+PA reserves; and
  • Increased our reserve life index(2) ("RLI") on a TP+PA basis from 25.9 years to 27.4 years as compared to year end 2014, and maintained the RLI on a TP basis at 13 years. 

Summary of Corporate Reserves Data

The following table outlines NuVista's corporate finding and development costs in more detail:

  3 Year-Average (1) 2015 (1) 2014 (1)
  Proved Proved plus probable Proved Proved plus probable Proved Proved plus probable

After reserve revisions and including changes in future development capital

           

Finding and development costs ($/Boe)

$12.96 $9.53 $8.11 $3.69 $13.67 $10.55

1F&D costs are used as a measure of capital efficiency. The calculation for finding and development costs includes all exploration and development capital for that period plus the change in future development capital for that period. This total capital including the change in the future development capital is then divided by the change in reserves for that period including revisions for that same period. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during the year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for the year. 

The following table provides summary reserve information based upon the GLJ Report using the published GLJ January 1, 2016 price forecast set forth:

  Natural Gas(2) Natural Gas Liquids Oil(3) Total
  Working Interest Working Interest Working Interest Working Interest

Reserves category(1)

(MMcf) (MBbls) (MBbls) (MBoe)

Proved

       
 

Developed producing

156,665 11,267 21 37,399
 

Developed non-producing

21,866 1,506 22 5,172
 

Undeveloped

312,991 23,128 29 75,322

Total proved

491,521 35,901 72 117,894

Probable

560,849 41,295 63 134,833

Total proved plus probable

1,052,370 77,196 135 252,726

1Numbers may not add due to rounding.
2Includes conventional natural gas, shale gas and coal bed methane.
3Includes light, medium and heavy crude oil.

The following table is a summary reconciliation of the 2015 year end working interest reserves with the working interest reserves reported in the 2014 year end reserves report:

Summary of Corporate Net Present Value Data

The estimated net present values of future net revenue before income taxes associated with NuVista's reserves effective December 31, 2015 and based on published GLJ future price forecast as at January 1, 2016 as set forth below are summarized in the following table:

The estimated future net revenue contained in the following table does not necessarily represent the fair market value of the reserves. There is no assurance that the forecast price and cost assumptions contained in the GLJ Report will be attained and variations could be material. The recovery and reserve estimates described herein are estimates only. Actual reserves may be greater or less than those calculated.

 

Before income taxes

 

Discount factor (%/year)

Reserves category (1) ($ thousands)

0% 5% 10% 15% 20%

Proved

         

Developed producing

427,075 349,249 296,781 259,567 231,996

Developed non-producing

64,905 46,714 35,903 28,868 23,977

Undeveloped

665,202 360,081 191,431 93,590 34,240

Total proved

1,157,182 756,044 524,114 382,025 290,214

Probable

1,911,623 963,952 534,086 314,574 191,335

Total proved plus probable

3,068,804 1,719,996 1,058,200 696,598 481,549

1Numbers may not add due to rounding.

The following table is a summary of pricing and inflation rate assumptions based on published GLJ forecast prices and costs as at January 1, 2015:

  Natural
Gas

Liquids

Oil

   

Year

AECO
Gas Price
($Cdn/
Mmbtu)
Edmonton
Condensate
($Cdn/Bbl)
Edmonton
Propane
($Cdn/Bbl)
Edmonton
Butane
($Cdn/Bbl)
WTI
Cushing
Oklahoma
($US/Bbl)
Edmonton
Par Price
40 API
($Cdn/Bbl)
Inflation
Rates %
/ Year(1)
Exchange
Rate(2)
($US/$Cdn)

Forecast

               

2016

2.76 60.79 9.58 41.90 44.00 55.86 2.0 0.725

2017

3.27 68.48 16.00 48.00 52.00 64.00 2.0 0.750

2018

3.45 73.17 20.52 51.29 58.00 68.39 2.0 0.775

2019

3.63 78.91 25.81 55.31 64.00 73.75 2.0 0.800

2020

3.81 84.30 27.58 59.09 70.00 78.79 2.0 0.825

2021

3.90 88.12 28.82 61.76 75.00 82.35 2.0 0.850

2022

4.10 94.41 30.88 66.18 80.00 88.24 2.0 0.850

2023

4.30 100.71 32.94 70.59 85.00 94.12 2.0 0.850

2024

4.50 103.24 33.77 72.36 87.88 96.48 2.0 0.850

2025

4.60 105.30 34.44 73.81 89.63 98.41 2.0 0.850

2026+

+2%/yr +2%/yr +2%/yr +2%/yr +2%/yr +2%/yr 2.0 0.850

1Inflation rate for costs.
2Exchange rate used to generate the benchmark reference prices in this table. 




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