well trusted management team pulls thru......congrats.





Twin Butte Energy 2012 Year End Reserve and Operational Update


CALGARY, Feb. 27, 2013 /CNW/ - Twin Butte Energy Ltd. (TSX:TBE.TO - News) ("Twin Butte" or the "Company") is pleased to provide an operations update and information on its oil and gas reserves as of December 31, 2012. Twin Butte anticipates releasing Q4 and year end 2012 audited financial and operating results after market close on March 21, 2013.

Operations Update

On January 31, 2013, Twin Butte provided an operational update that noted it had encountered reservoir performance issues at its Primate property in western Saskatchewan. At that time, the Company noted that the property's production had declined during the month of January from a peak of 3,400 bbls per day to 2,500 bbls per day due to increased water cuts and reduction of inflow on a number of producing wells. Since that time, the Company has successfully stabilized the property's production at approximately 2,600 bbls per day.  Twin Butte will continue to monitor and optimize production at Primate but believes that the property's sharp decline will not continue and that the property's point forward performance will be more analogous to other area properties. Based on analogy work conducted by both Twin Butte and McDaniel, it is believed that the property will continue to produce for a number of years and that the annual property production decline should be approximately 35 percent. Twin Butte's December 31, 2012 reserve analysis includes this assumption. As a result of positive technical revisions for Primate, the property's performance continues to exceed expectations of both our independent evaluators and internally.

Current corporate production is in excess of 18,000 boe per day up from the reported 17,800 boe per day at the end of January. Year to date, the Company has successfully drilled 20 gross (20 net) wells, including two horizontal wells at its Wildmere asset which was acquired in Q4 2012. Based on very encouraging early production data from the Wildmere wells, Twin Butte will be drilling another 2 to 4 horizontal wells on the property late in Q1 or early Q2.

Highlights of Twin Butte's Year End 2012 reserves are as follows:

  • Completed an organic capital program of $58.4 million including the drilling of 95 gross (77 net) wells at a 96 percent success rate.
  • Drilling program generated total proved plus probable finding and development ("F&D") costs of $18.18 per boe including changes in future development costs, representing a 1.6 times organic recycle ratio based on average 2012 operating netback of $29.14 per boe.
  • Completed three corporate and two asset acquisitions as well as two non-core dispositions for a total cost of $455.5 million. The acquisitions materially grew Twin Butte's production, cash flow, and reserves, as well as significantly expanded its undeveloped land position in its core heavy oil operating area at Lloydminster. Excluding the value of the undeveloped land acquired ($57.5 million) the overall proved plus probable acquisition and divestiture costs were $22.61 per boe including changes in future development costs, representing a 1.3 times recycle ratio.
  • Generated one and three year average total proved plus probable finding, development and acquisition ("FD&A") costs of $24.00 and $21.38 respectively per boe including changes in future development costs.
  • Grew corporate proved and probable reserves by 58 percent from 35.6 Mboe at December 31, 2011 to 56.2 Mboe at December 31, 2012.
  • Increased corporate proved plus probable reserves liquids weighting to 73 percent at December 31, 2012 from 55 percent at December 31, 2011.
  • Primate property performance generated positive reserve revisions after accounting for January production reductions, showing the pool has exceeded our original expectations.