CALGARY, ALBERTA -- (Marketwire) -- 03/05/13 -- Pace Oil & Gas Ltd. (TSX: PCE) ("Pace" or the "Company") is pleased to provide an update on the status of its previously announced merger, selected information from Pace's 2012 reserve evaluation and its fourth quarter and 2012 year end operating and financial results.
STRATEGIC PROCESS UPDATE
On December 20, 2012, Pace entered into an arrangement agreement (the "Arrangement Agreement") with Charger Energy Corp. ("Charger") and AvenEx Energy Corp. ("AvenEx"), pursuant to which Pace, Charger and AvenEx agreed to amalgamate by way of a plan of arrangement (the "Arrangement") to form Spyglass Resources Corp. ("Spyglass"), an intermediate, dividend paying oil and gas producer. Meetings of the shareholders were scheduled for February 19, 2013 and later postponed until February 26, 2013.
On February 25, 2013, Pace, AvenEx and Charger amended the agreement to allow the parties to solicit and facilitate alternative transactions with other parties and to waive the termination fees in the event that one of the original parties enters into an alternate transaction (the "Amending Agreement"). Governance changes to Pace were announced on the same date, with Tom Buchanan resigning from the Board of Directors, Fred Woods stepping down as Chairman, President and CEO and Peter Harrison assuming the role of Chairman of the Board. The proposed Board of Directors of Spyglass upon completion of the Arrangement was also amended. On February 26, 2013, the meetings of the shareholders of each of Pace, Charger and AvenEx were adjourned to March 26, 2013. The Pace Board of Directors continue to recommend shareholders vote in favour of the Arrangement and Board members eligible to vote unanimously approved the Arrangement and the Amending Agreement.
With the Amending Agreement, Pace is actively soliciting alternate superior proposals. National Bank Financial Inc. ("NBF") is acting as exclusive financial advisor to Pace with respect to its review of strategic alternatives available to maximize value to Pace shareholders. Interested parties may contact Tom MacInnis, Head of Global Energy Group and Managing Director, Investment Banking for NBF at (403) 290-5107.
Q1 2013 UPDATE
In Q1 2013, Pace has operated with a reduced capital program and expects Q1 2013 capital spending to be approximately $13 million. The Company estimates Q1 2013 production to be approximately 12,000 boe/d comprised of approximately 6,100 bbls/d of liquids and 35.5 mmcf/d of natural gas.
RESERVE SUMMARY
-- Total proved developed producing ("PDP") reserves of 32.7 mmboe (66% liquids); total proved ("TP") reserves of 41.1 mmboe (59% liquids) and total proved plus probable ("2P") reserves of 61.2 mmboe (55% liquids).-- The ratio of PDP to 2P reserves increased from 47% at Dec. 31, 2011 to 53% at Dec. 31, 2012.-- PDP oil and liquids reserves increased to 21.6 mmbbls at Dec. 31, 2012 from 19.0 mmbbls at Dec. 31, 2011.-- The Company reduced its proved plus probable ("2P") natural gas reserves by 6.1 mmboe due to economic factors including removing 90 gross (51.9 net) probable gas locations.Summary of Oil and Gas Reserves and Net Present Values of Future Net RevenueAs of December 31, 2012 Forecast Prices and Costs Light and Medium Oil Heavy Oil Natural Gas --------------------------------------------------------- Gross(1) Net(2) Gross(1) Net(2) Gross(1) Net(2) (Mbbls) (Mbbls) (Mbbls) (Mbbls) (MMcf) (MMcf)----------------------------------------------------------------------------Proved Developed Producing 20,198 15,139 913 816 66,843 60,750 Developed Non- Producing 326 220 48 41 15,735 11,659 Undeveloped 1,965 1,563 25 23 19,231 17,436----------------------------------------------------------------------------Total Proved 22,489 16,922 985 880 101,809 89,846Probable Developed Probable 7,437 5,215 301 256 35,476 31,414 Undeveloped Probable 1,581 1,247 50 44 27,314 24,515----------------------------------------------------------------------------Total Probable 9,018 6,462 352 300 62,789 55,929----------------------------------------------------------------------------Total Proved Plus Probable 31,507 23,384 1,337 1,180 164,598 145,775-------------------------------------------------------------------------------------------------------------------------------------------------------- Natural Gas Liquids Total Oil Equivalent --------------------------------------------------------- Gross(1) Net(2) Gross(1) Net(2) (Mbbls) (Mbbls) (Mboe) (Mboe)----------------------------------------------------------------------------Proved Developed Producing 498 342 32,749 26,423 Developed Non- Producing 109 74 3,106 2,278 Undeveloped 28 19 5,223 4,511----------------------------------------------------------------------------Total Proved 635 436 41,077 33,212Probable Developed Probable 266 183 13,917 10,890 Undeveloped Probable 41 27 6,225 5,404----------------------------------------------------------------------------Total Probable 308 211 20,142 16,294----------------------------------------------------------------------------Total Proved Plus Probable 942 646 61,220 49,506--------------------------------------------------------------------------------------------------------------------------------------------------------Notes: (1) the Company's interest in reserves, which are its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Company (2) the Company's interest in reserves its working interest (operating or non-operating) share after deduction of royalty obligations, plus its royalty interests in production or reserves;
