Peyto Improves Reserve Replacement Efficiency in 2007
Peyto Energy Trust presented the results and analysis of the independent reserve report effective December 31, 2007. The evaluation encompassed 100% of the Trust's reserve assets and was conducted by Paddock Lindstrom and Associates Ltd. ("PLA") in compliance with National Instrument 51-101 and in accordance with the COGE (Canadian Oil and Gas Evaluation) Handbook.
For the eighth consecutive year, Peyto has grown its reserves, and associated net asset value, from which sustainable distributions are funded. Since inception, Peyto has invested a total of $1.4 billion to build, with the drill bit, total proved assets that have funded cumulative distributions of $622 million and have a remaining value of $2.5 billion (Before Tax, Net Present Value, discounted at 5%, "BT NPV(5)", debt adjusted).
For 2007, Peyto invested $122 million, less than 45% of its cash flow, to replace over 125% of its annual production with new Proved Producing reserves at a Finding, Development and Acquisition ("FD&A") cost of $12.68/boe. As a result, the value (BT NPV(5), debt adjusted) of the remaining Proved Producing reserve assets was maintained at $19.53/unit.
Peyto replaced 175% of production with new Total Proved reserves at a FD&A cost of $9.42/boe and 117% of production with new Proved plus Probable Additional reserves at a FD&A cost of $9.38/boe (including the changes in future development capital).
The reserve life index ("RLI") increased by at least one year in all categories with Proved Producing RLI of 13 years, Total Proved RLI of 16 years, and Proved plus Probable Additional RLI of 21 years.
The distribution life index ("DLI", as defined below) of the Proved Producing assets increased from 23 years in 2006 to 24 years in 2007, indicating that distributions are more sustainable today than a year ago.
The value of Peyto's proven assets, or the BT NPV(5), of the Total Proved reserves, grew 3% to $3.0 billion in 2007. Adjusting for changes in debt and the number of units outstanding, this NPV/unit grew 3% to $23.80/unit.
The BT NPV(5), of the Proved plus Probable Additional reserves grew 1% to $3.7 billion in 2007. Adjusting for changes in debt and the number of units outstanding, this NPV/unit remained effectively the same at $30.77/unit.