It should not be assumed that the estimates of future net revenues contained herein represent the fair market value of the Company's reserves. There is no assurance that the forecast prices and cost assumptions applied by D&M in evaluating the reserves of Lone Pine will be attained, and variances could be material. The reserves estimates attributed to the Company's properties are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and NGL reserves may be greater than or less than the estimates provided herein, and the difference may be material.
The determination of oil and gas reserves involves estimating subsurface accumulations of oil and natural gas that cannot be measured in an exact manner. The preparation of estimates is subject to an inherent degree of associated risk and uncertainty, including many factors that are beyond our control. The estimation and classification of reserves is a complex process involving the application of professional judgment combined with geological and engineering knowledge to assess whether specific classification criteria have been satisfied. It requires significant judgments and decisions based on available geological, geophysical, engineering and economic data as well as forecasts of commodity prices and anticipated costs. The accuracy of any reserves estimate is a function of the quality of available data and its interpretation, and estimates by different reserves engineers often vary, sometimes significantly. As circumstances change and additional data becomes available, whether through the results of drilling, testing and production or from economic factors such as changes in product prices or development and production expenses, reserves estimates also change. Revisions may be positive or negative. Oil and gas quantities ultimately recovered will vary from reserves estimates.
Reserve Life Index and Reserves Replacement Ratio
Lone Pine's estimated proved plus probable reserve life index of 21.7 years, as disclosed in this news release, was calculated by dividing the Company's estimated proved plus probable reserves of 98,236 Mboe (gross) as of December 31, 2012, by its fourth quarter of 2012 average daily production rate of 12,328 boe/d (gross).
Lone Pine's reserves replacement ratio of 195% of 2012 annual production on a proved plus probable basis, as disclosed in this news release, was calculated by dividing the year-over-year increase in the Company's estimated proved plus probable reserves from December 31, 2011 to December 31, 2012 of 7,791 Mboe (gross), by its total 2012 production from remaining properties of 3,998 Mboe (gross).
Lone Pine Resources Inc. is engaged in the exploration and development of natural gas and light oil in Canada. Lone Pine's reserves, producing properties and exploration prospects are located in Canada in the provinces of Alberta, British Columbia and Quebec and the Northwest Territories. Lone Pine's common stock trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol LPR. For more information about Lone Pine, please visit its website at www.lonepineresources.com.
Lone Pine Resources Inc.
David M. Fitzpatrick
Interim Chief Executive Officer
Lone Pine Resources Inc.
Shane K. Abel
Vice President, Finance & Treasurer
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