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NOVUS ENERGY INC. REPORTS SIGNIFICANT 2010 RESERVES &; PRODUCTION GROWTH AND PROVIDES OPERATIONAL UPDATE

^{Published on 2011-03-15 05:11:18 - Market Wire}
 

 - Proved plus probable reserves at December 31, 2010 increased by 269% to 9.24 million boe, up substantially from 2.51 million boe on December 31, 2009. - Proved reserves at December 31, 2010 increased by 229% to 4.83 million boe, up from 1.47 million boe on December 31, 2009. - Reserve replacement for the year was 1,754% on a proved plus probable basis and 926% based on proved reserves. - The net present value of proved plus probable reserves, before income tax and discounted at 10%, increased 285% to $164.2 million from $42.7 million at December 31, 2009, representing an increase of $121.5 million. - On a fully diluted share basis, proved plus probable reserves increased 176%, while total proved reserves increased 147%. - The Company's Reserve Life Index at December 31, 2010 was 16.1 years on a proved plus probable basis and 8.4 years on a proved basis (based on annualized fourth quarter 2010 production). - Oil and natural gas liquids ("NGLs") at December 31, 2010 represent 84% of proved plus probable reserves on a boe basis up from 66% at December 31, 2009. Oil and NGLs represent 81% of total proved reserves, up from 62% at December 31, 2009. - Finding, development and acquisition costs, excluding future development capital, were $9.57 per boe for proved plus probable reserves and $18.13 per boe for proved reserves. Including future development capital, finding, development and acquisition costs were $25.77 per boe for proved plus probable reserves and $40.28 per boe for proved reserves. The 2010 finding, development and acquisition costs included significant amounts for land and facilities as the Company completed several land focused acquisitions and embarked upon certain facility projects as it assembled its extensive portfolio of assets. - In the greater Dodsland area of Saskatchewan, which encompasses the Company's core properties, the 2010 capital program resulted in a 475% increase in proved plus probable reserves. The Dodsland area accounts for 7.74 million boe of proved plus probable reserves which represents 84% of the Company's total proved plus probable reserve volumes. - Sproule previously provided Novus with an independent Contingent Resource Assessment for the Company's Dodsland Viking light oil assets (the "Contingent Resource Assessment"), the intent of which was to independently assess the contingent resource potential of the area. The Contingent Resource Assessment, effective as at November 30, 2010 and press released on December 6, 2010, reports a "best estimate" of Discovered Petroleum Initially-In-Place ("DPIIP") on Novus working interest and option lands totaling 559.5 million barrels ("MMSTB") of light Viking oil consisting of 383.2 MMSTB on Company owned land and an additional 176.3 MMSTB on lands under option to Novus. In the Contingent Resource Assessment, approximately 50% of the net acreage controlled by Novus (40.53 net sections owned and 13.53 net sections under option) was recognized by Sproule as containing DPIIP. 2010 Operational Highlights - The Company's average production was 1,115 boe/d. - The Company's fourth quarter average production was 1,571 boe/d. - December average production was 1,675 boe/d. - Operating netbacks in the fourth quarter for the Company's Viking light oil lands at Dodsland were $43.63 per boe. - In the fourth quarter, Novus drilled 17 Viking horizontal wells (17 net) in the Dodsland area for a 100% success rate. Over the year, Novus operated the drilling of a total of 33 gross (33 net) successful Viking horizontal oil wells. All but one of these wells is currently on production. 

 (acres) Developed Undeveloped Total Gross Net Gross Net Gross Net ------------------------------------------------------------------------- Alberta 69,910 36,010 44,160 26,664 114,070 62,674 Saskatchewan 17,694 11,965 95,914 84,060 113,608 96,025 Other 1,943 1,347 1,943 932 3,886 2,279 ------------------------------------------------------------------------- Total 89,547 49,322 142,017 111,656 231,564 160,978 ------------------------------------------------------------------------- 

 ------------------------------------------------------ Light and Medium Heavy Oil Natural Gas Oil Liquids Gross Net Gross Net Gross Net ------------------------------------------------------ (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) Proved Producing 1,174.6 984.2 - - 62.1 43.5 Non-Producing 26.3 23.5 - - 0.7 0.6 Undeveloped 2,583.8 2,375.5 63.7 52.6 8.2 7.0 ------------------------------------------------------------------------- Total Proved 3,784.7 3,383.3 63.7 52.6 70.9 51.1 Probable 3,626.3 3,289.4 132.3 109.1 52.4 36.9 ------------------------------------------------------------------------- Total Proved plus Probable 7,410.9 6,672.7 196.0 161.7 123.3 88.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------ Natural Gas Barrels of oil equivalent Gross Net Gross Net ------------------------------------ (Mmcf) (Mmcf) (Mboe) (Mboe) Proved Producing 3,629 3,021 1,841.5 1,531.3 Non-Producing 59 49 36.8 32.2 Undeveloped 1,774 1,580 2,951.3 2,698.4 ------------------------------------------------------- Total Proved 5,462 4,650 4,829.6 4,261.9 Probable 3,587 3,080 4,408.7 3,948.8 ------------------------------------------------------- Total Proved plus Probable 9,048 7,730 9,238.3 8,210.7 ------------------------------------------------------- ------------------------------------------------------- Notes: 1. "Gross" means the Company's reserves before calculation of royalties, and before consideration of the Company's royalty interests. 2. "Net" means the Company's reserves after deduction of royalty obligations, and including the Company's royalty interests. 3. Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. 4. Columns may not add due to rounding. 

 ------------------------------------------------------------------------- (M$) 0% 5% 10% 15% 20% ------------------------------------------------------------------------- Proved Producing 65,718 56,180 49,385 44,323 40,412 Non-Producing 1,215 1,007 856 744 656 Undeveloped 58,511 37,111 22,643 12,643 5,598 ------------------------------------------------------------------------- Total Proved 125,445 94,298 72,884 57,709 46,666 Probable 185,461 126,686 91,317 68,655 53,346 ------------------------------------------------------------------------- Total Proved plus Probable 310,905 220,984 164,202 126,364 100,012 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Notes: 1. Net present value of future net revenue includes all resource income: - Sale of oil, gas, and by-product reserves - Processing third party reserves - Other income 2. Values are based on net reserve volumes 3. Columns may not add due to rounding 

 $US/$Cdn WTI @ AB Edmonton Hardisty Natural Gas at Year Exchange Rate Cushing Light Bow River AECO-C Spot ------------------------------------------------------------------------- (US$/bbl) (C$/bbl) (C$/bbl) (C$/Mmbtu) 2011 0.932 88.40 93.08 81.91 4.04 2012 0.932 89.14 93.85 82.59 4.66 2013 0.932 88.77 93.43 81.28 4.99 2014 0.932 88.88 93.54 80.44 6.58 2015 0.932 90.22 94.95 81.66 6.69 2016 0.932 91.57 96.38 82.89 6.80 2017 0.932 92.94 97.84 84.14 6.91 2018 0.932 94.34 99.32 85.41 7.02 2019 0.932 95.75 100.81 86.70 7.14 2020 0.932 97.19 102.34 88.01 7.26 2021+ 0.932 +1.5%/yr +1.5%/yr +1.5%/yr +1.5%/yr ------------------------------------------------------------------------- 

 3 Year Finding & Development Costs - Proved 2010 2009 Average ------------------------------------------------------------------------- Capital expenditures (excluding acquisitions and dispositions) 53,711 5,371 20,601 Change in future development capital 77,895 3,875 28,731 ------------------------------------------------------------------------- Total capital for F&D 131,606 9,246 49,332 Reserve additions, excluding acquisitions and dispositions (Mboe) 3,333.8 382.5 1,270.1 Proved F&D costs - including future development capital ($/boe) 39.48 24.17 38.84 Proved F&D costs - excluding future development capital ($/boe) 16.11 14.04 16.22 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Finding & Development Costs - Proved plus 3 Year probable 2010 2009 Average ------------------------------------------------------------------------- Capital expenditures (excluding acquisitions and dispositions) 53,711 5,371 20,601 Change in future development capital 105,102 5,000 39,119 ------------------------------------------------------------------------- Total capital for F&D 158,813 10,371 59,720 Reserve additions, excluding acquisitions and dispositions (Mboe) 6,382.9 430.4 2,284.4 Proved plus probable F&D costs - including future development capital ($/boe) 24.88 24.10 26.14 Proved plus probable F&D costs - excluding future development capital ($/boe) 8.41 12.48 9.02 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Finding, Development & Acquisition 3 Year Costs - Proved 2010 2009 Average ------------------------------------------------------------------------- Capital expenditures (including acquisitions, net of dispositions) 68,349 28,455 38,761 Change in future development capital 83,509 7,075 31,669 ------------------------------------------------------------------------- Total capital for FD&A 151,858 35,530 70,430 Reserve additions, including net acquisitions (Mboe) 3,770.3 610.0 1,668.8 Proved FD&A costs - including future development capital ($/boe) 40.28 58.25 42.20 Proved FD&A costs - excluding future development capital ($/boe) 18.13 46.65 23.23 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Finding, Development & Acquisition Costs - 3 Year Proved plus probable 2010 2009 Average ------------------------------------------------------------------------- Capital expenditures (including acquisitions, net of dispositions) 68,349 28,455 38,761 Change in future development capital 115,584 10,450 44,430 ------------------------------------------------------------------------- Total capital for FD&A 183,933 38,905 83,191 Reserve additions, including net acquisitions (Mboe) 7,138.4 853.6 3,023.3 Proved plus probable FD&A costs - including future capital ($/boe) 25.77 45.58 27.52 Proved plus probable FD&A costs - excluding future capital ($/boe) 9.57 33.34 12.82 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Notes: 1. The reserves used in the above calculations are Company gross reserves additions, including revisions. 2. The 2010 capital expenditures used in the above calculations are unaudited as the Company's consolidated financial statements are in the process of being finalized. These numbers and calculations thereon are subject to change upon completion of the audit. 

 ------------------------------------------------------------------------- Production - Mboe 407.0 ------------------------------------------------------------------------- Proved plus probable reserve additions (Mboe) 7,138.4 Proved plus probable reserve replacement (%) 1,754% ------------------------------------------------------------------------- Proved reserve additions (Mboe) 3,770.3 Proved reserve replacement (%) 926% ------------------------------------------------------------------------- 

 - Use its strong balance sheet to increase exploration and development expenditures and increase its oil resource focus through acquisitions; - Continue to improve operating efficiencies through an improved cost structure; - Continue to grow the Company's production and reserves on a per share basis; and - Continue to build and validate the potential of the Company's oil resource focused assets, particularly in the Dodsland area of Saskatchewan.