Pine Cliff Energy Ltd. Announces Update to Carrot Creek Asset Acquisition


CALGARY, ALBERTA--(Marketwire - Feb. 16, 2012) - Pine Cliff Energy Ltd. ("Pine Cliff" or "the Company") ( (TSX VENTURE:PNE.V - News) is pleased to announce the following update to its acquisition of certain oil and natural gas assets in the Carrot Creek area in the Province of Alberta (the "Carrot Creek Assets") for cash consideration of $23.5 million (the "Acquisition"), which was announced in Pine Cliff's news release dated February 9, 2012.

As previously disclosed, the Carrot Creek Assets have current estimated production of 950 barrels of oil equivalent (BOE) per day, of which approximately 23 percent consists of oil and natural gas liquids and 77 percent consists of natural gas. In addition to the producing assets, Pine Cliff will also acquire 15.3 net sections of prospective land some of which has current vertical production. Pine Cliff anticipates that this land has multi-zone potential which can be further exploited using horizontal drilling technology. Pine Cliff has also negotiated preferential pricing for processing a portion of its natural gas and liquids production at a gas plant owned and operated by the vendor of the Carrot Creek Assets.

Reserves Data for the Carrot Creek Assets

An independent reserve evaluation was prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") dated February 10, 2012 with an effective date of January 1, 2012 (the "McDaniel Report") in respect of the Carrot Creek Assets. The McDaniel Report has been prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities using McDaniel's forecast prices and costs at January 1, 2012 in Canadian dollars.

The future net revenues presented in the McDaniel Report may not necessarily represent the fair market value of the reserves estimates. There is no assurance that such price and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas liquids and natural gas reserves may be greater than or less than the estimates provided herein.

The reserves relating to the Carrot Creek Assets are summarized below.

Summary of Remaining Reserves

Forecast Prices as of January 1, 2012

                             Natural Gas                                    

             Light and    (non-associated    Natural Gas                    

             Medium Oil     & associated)       Liquids      BOE      BOE   



Reserve     Gross    Net     Gross       Net  Gross    Net    Gross      Net

 Category  (Mbbl) (Mbbl)    (MMcf)    (MMcf) (Mbbl) (Mbbl)   (MBOE)   (MBOE)




 Producing   63.0   56.6   8,007.6   6,965.9  291.0  180.0  1,688.7  1,397.5



 Producing    0.0    0.0     556.0     504.3   20.0   12.9    112.7     97.0

Undeveloped   0.0    0.0   1,201.1   1,095.9   43.2   33.7    243.4    216.3



 Proved      63.0   56.6   9,764.7   8,566.2  354.3  226.5  2,044.8  1,710.8


Probable     31.8   28.6   5,070.7   4,457.8  183.2  117.3  1,060.1    888.9





 Probable    94.9   85.2  14,835.4  13,024.0  537.4  343.8  3,104.9  2,599.7


(i) Columns may not add due to rounding

The following table summarizes the undiscounted value and the present value, discounted at 5%, 10% and 15%, of the estimated future net revenue of the Carrot Creek Assets based on forecast price and cost assumptions as of January 1, 2012.

Summary of Net Present Values of Future Net Revenue - Before Income Taxes

Forecast Prices as of January 1, 2012

                                                                 Unit Value 

                                                               before Income

                                Before Income Taxes (M$)       Taxes ($/boe)



                               0%        5%       10%       15%       at 10%


Reserves Category                                                           

Proved Developed                                                            

 Producing               33,349.7  28,193.6  24,490.1  21,720.7        17.55

Proved Developed Non-                                                       

 Producing                1,754.7   1,448.6   1,224.7   1,055.7        12.63

Proved Undeveloped        2,920.6   1,966.4   1,322.7     875.6         6.11


Total Proved             38,025.0  31,608.5  27,037.4  23,652.0        15.82

Total Probable           24,967.7  17,086.9  12,551.1   9,698.7        14.13


Total Proved plus                                                           

 Probable                62,992.7  48,695.4  39,588.6  33,350.7        15.24


McDaniel's price forecast utilized in the McDaniel Report is summarized below.

McDaniel January 1, 2012 Price Forecast

                                             Natural Gas at                 

               West Texas    Edmonton Light   Alberta AECO                  

              Intermediate      Crude Oil      Spot Price   Foreign Exchange

Year         Crude ($US/Bbl)   ($Cdn/Bbl)     ($Cdn/MMbtu)     ($US/$Cdn.)  


2012              97.50           99.00           3.50            0.975     

2013              97.50           99.00           4.20            0.975     

2014             100.00          101.50           4.70            0.975     

2015             100.80          102.30           5.10            0.975     

2016             101.70          103.20           5.55            0.975     

2017             102.70          104.20           5.90            0.975     

2018             103.60          105.10           6.25            0.975     

2019             104.50          106.00           6.45            0.975     

2020             105.40          106.90           6.70            0.975     

2021             107.60          109.20           6.85            0.975     

2022             109.70          111.30           6.95            0.975     

2023             111.90          113.50           7.05            0.975     

2024             114.10          115.80           7.20            0.975     

2025             116.40          118.10           7.40            0.975     

2026             118.80          120.50           7.55            0.975     


 post 2026        2%/yr           2%/yr           2%/yr           0.975     

Trading Halt

Pursuant to the policies of the TSX Venture Exchange (the "Exchange"), the Acquisition is a "fundamental acquisition" and accordingly, pursuant to such policies, the common shares of Pine Cliff were halted from trading on the Exchange pending receipt and review by the Exchange of acceptable documentation regarding the Acquisition. Pine Cliff anticipates trading will resume shortly and that a notice announcing the exact timing of the resumption of trading will be circulated by the regulators following the dissemination of this release.

Closing Conditions

The Acquisition is subject to standard industry closing conditions, including due diligence, title review and regulatory and stock exchange approval. In addition, the Acquisition is conditional upon the vendor of the Carrot Creek Assets completing its acquisition of the Carrot Creek Assets from a third party, which acquisition is expected to close concurrently with the closing of this Acquisition. Subject to the satisfaction or waiver of all conditions set forth in the Purchase Agreement, it is currently anticipated that the closing of the Acquisition will occur on or about March 1, 2012.


The corporate strategy for the Company's Board of Directors and management is to attempt to provide above average industry returns for short-term investors and higher rates of returns for long-term investors. Pine Cliff will focus on maintaining a strong balance sheet, drilling oil and high liquid gas wells in the near-term, purchasing additional producing and non-producing properties (including dry gas production) and controlling operating and administrative costs. The Carrot Creek Assets acquisition is a first step towards attaining the Company's goals.

Pine Cliff's present production is approximately 1,085 BOE per day. The Company's non-producing properties are currently being evaluated and drill locations will be chosen for a summer drill program.

For Further Information:

Further information relating to Pine Cliff may be found on as well as on Pine Cliff's website at


This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States, absent U.S. registration or an applicable exemption therefrom, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities law of such state. The Pine Cliff common shares will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person, absent registration or an applicable exemption therefrom.

Reserve Disclosure

There are numerous uncertainties inherent in estimating quantities of reserves. The reserve information set out in this press release are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. There is a 50 percent probability that the quantities actually recovered will equal or exceed the estimated proved plus probable reserves.

Barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6Mcf:1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Special Note Regarding Forward-Looking Information

This press release contains certain statements or disclosures relating to Pine Cliff that are based on the expectations of Pine Cliff as well as assumptions made by and information currently available to Pine Cliff which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Pine Cliff anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. In particular, this press release makes reference to the timing and completion of the expected completion of the Acquisition, including the ability of Pine Cliff to satisfy all necessary conditions to the closing of the Acquisition, the anticipated benefits of the Acquisition, crude oil reserve and resource volumes associated with the properties to by acquired, expected production from the properties to be acquired pursuant to the Acquisition and timing of exploration and production activities.

Readers are cautioned that there is no assurance that the transactions referenced herein will proceed. Certain conditions must be met before the Acquisition can be completed. Such conditions include the receipt of all necessary regulatory approvals, including the approval of the Exchange. There is no assurance that the required approvals will be received and there is therefore no assurance that the Acquisition will be completed in the time frame anticipated or at all. Many factors could cause the performance or achievement by Pine Cliff to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include the failure to obtain the required approvals, including the approval of the TSX Venture Exchange. Readers are cautioned that the foregoing list of factors is not exhaustive. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Pine Cliff is not under any duty to update any of the forward-looking statements after the date of this press release or to conform such statements to actual results or to changes in Pine Cliff's expectations and Pine Cliff disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

George F. Fink
Pine Cliff Energy Ltd.
Executive Chairman of the Board
(403) 269-2289
(403) 265-7488 (FAX)

Phil Hodge
Pine Cliff Energy Ltd.
President and CEO
(403) 269-2289
(403) 265-7488 (FAX)

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