(1) That portion of DPIIP not produced to-date, and not included in the reserve component is currently deemed unrecoverable as per NI-51-101 definitions. DPIIP currently cannot be further subcategorized as it is not possible at this time to define the enhanced recovery project for this DPIIP. Management believes that current delineation, in-fill drilling, and secondary recovery including, but not limited to, waterflood, will add to the total recoverable volume.
1. Production is defined as production to December 31, 2012, the effective date of the Resource Assessment. Proved and probable reserves are as at December 31, 2012 as evaluated by Sproule in its independent reserve evaluation prepared effective December 31, 2012 utilizing forecast prices and costs at January 1, 2013 (the "Sproule Year-End Reserve Evaluation").2. Reserves for the low case are proved reserves as evaluated in the Sproule Year-End Reserve Evaluation. Reserves for the best case are proved plus probable reserves as evaluated in the Sproule Year-End Reserve Evaluation. Reserves for the high case are proved plus probable reserves as evaluated in the Sproule Year-End Reserve Evaluation plus possible reserves as evaluated in the Resource Assessment. Reference is made to the Company's statement of reserves data for the year ended December 31, 2012, which includes detailed disclosure of the Company's oil and gas reserves and other oil and gas information in accordance with National Instrument 51-101 ("NI 51-101"), including the Sproule Year-End Reserve Evaluation, as contained in our Annual Information Form for the year ended December 31, 2012, which is available on our SEDAR profile at www.sedar.com.3. Production and reserves reflected in the above table are included in the Discovered Initial In-Place numbers also in the table.
A best case estimate of the oil portion of DPIIP on Long Run's Montney lands in the Evaluated Area yields a total of 301.2 million barrels, with cumulative production of 1.9 million barrels and corresponds to booked remaining proved + probable reserves of 13.6 million barrels. While early in the development of this asset as an oil project, Long Run is able to leverage previous natural gas development work to provide extensive reservoir data through well-control and therefore partially mitigate geologic risk.
Long Run is currently in the process of generating production and injection predictions for various operating scenarios including full-field peripheral water injection and varied well density configurations. Approvals have been received from the Alberta Energy Regulator ("AER") to initiate water injection as part of the commercial phase of Long Run's developing EOR program in the Montney. Water injection commenced during the second quarter of 2013 at Normandville. Through the commercial application of waterflood technologies and increased drilling density, Long Run intends to increase recoveries of crude oil volumes and grow the value of this asset.
Long Run believes that this resource assessment, combined with development success to-date, demonstrates the significant value of this play as a highly economic and profitable project.
While water-flood technologies have been used in what Long Run believes to be analogous pools, the effectiveness of such techniques in the Evaluated Areas covered by the Resource Assessment has not been established. There is no certainty that enhanced recovery techniques, and additional infill drilling which is planned, will increase recoveries. Enhanced recovery projects have historically been developed sequentially over a number of drilling seasons and are subject to annual budget constraints. Long Run's policy of orderly development on a staged basis, the short and long-term view of Long Run on commodity prices, the results of exploration development activities of Long Run and others in the area and possible infrastructure capital constraints will determine the pace of development. Given the uncertainties associated with the development of the project there could be additional risks which are difficult to quantify given the early stage of this project. As with any resource estimates, the evaluation will change over time as new information becomes available. There is no certainty that it will be commercially viable to produce any portion of the resources.