Attached files
file | filename |
---|---|
8-K - FORM 8-K - ENCORE ACQUISITION CO | d70833e8vk.htm |
EX-99.2 - EX-99.2 - ENCORE ACQUISITION CO | d70833exv99w2.htm |
Exhibit 99.1
Encore Acquisition Company Announces Year-End Proved
Reserves and Certain Fourth Quarter 2009 Operating Results
Reserves and Certain Fourth Quarter 2009 Operating Results
FORT WORTH, Texas (BUSINESS WIRE) February 1, 2010 Encore Acquisition Company (NYSE:
EAC) (Encore or the Company) today announced year-end 2009 reserves and certain fourth quarter
2009 operating results.
Proved Reserves
Total proved oil and natural gas reserves at December 31, 2009 were 220.3 million barrels of oil
equivalent (BOE), consisting of 147.1 million barrels of crude oil, condensate, and natural gas
liquids and 439.1 billion cubic feet of natural gas. Proved reserves were calculated utilizing
twelve month average prices during 2009, or $61.18 per Bbl of oil and $3.83 per Mcf of natural gas.
Prior year proved reserves were calculated based on year-end 2008 spot market prices of $44.60 per
Bbl of oil and $5.62 per Mcf of natural gas.
Using 2009 average prices, the estimated discounted net present value
of Encores
proved oil and natural gas reserves, before projected income taxes and net
abandonment costs, using a 10 percent per annum discount rate
(PV-10 Value) was
approximately $2.1 billion at December 31, 2009, as compared to a PV-10 value of
approximately $1.4 billion at December 31, 2008 using unescalated year-end 2008
prices.
At December 31, 2009, oil reserves accounted for 67 percent of total proved reserves, and 80
percent of total proved reserves are developed. The following table summarizes the changes in
proved reserves:
MBOE | ||||
Reserves at December 31, 2008 |
185,705 | |||
Purchases of minerals-in-place |
24,078 | |||
Sales of minerals-in-place |
(117 | ) | ||
Extensions and discoveries |
21,502 | |||
Revisions of previous estimates |
4,774 | |||
Production |
(15,669 | ) | ||
Reserves at December 31, 2009 |
220,273 | |||
Encores proved reserve estimates for 100 percent of its properties were prepared by independent
petroleum engineers.
Fourth Quarter Operating Results
Encores fourth quarter production averaged 45,143 BOE per day, consisting of 27,913 Bbls of oil
per day and 103,382 Mcf of natural gas per day. This represents an increase of eight percent over
the 41,824 BOE per day produced in the fourth quarter of 2008.
NYMEX oil prices averaged $75.98 per Bbl for the fourth quarter of 2009, and Encores wellhead
differential was a negative $8.04 per Bbl for the quarter. This represents a tightening in the
differential of $3.85 per Bbl from the $11.89 per Bbl differential in the fourth quarter of 2008.
NYMEX natural gas prices averaged $4.17 per Mcf for the fourth quarter of 2009, and the Companys wellhead
differential was a positive $0.49 per Mcf for the quarter as compared to a negative
$0.99 per Mcf in the fourth quarter of 2008.
Costs Incurred
During 2009, the Company completed 120 gross wells (48.9 net). The following table summarizes
Encores costs incurred related to oil and natural gas properties for the periods indicated:
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
(in thousands) | ||||||||
Acquisitions: |
||||||||
Proved properties |
$ | 402,457 | $ | 28,840 | ||||
Unproved properties |
17,087 | 128,635 | ||||||
Total acquisitions |
419,544 | 157,475 | ||||||
Development: |
||||||||
Drilling and exploitation |
121,259 | 362,609 | ||||||
Total development |
121,259 | 362,609 | ||||||
Exploration: |
||||||||
Drilling |
163,887 | 252,104 | ||||||
Geological and seismic |
1,022 | 2,851 | ||||||
Delay rentals |
774 | 1,482 | ||||||
Total exploration |
165,683 | 256,437 | ||||||
Total costs incurred |
$ | 706,486 | $ | 776,521 | ||||
The amounts provided in this press release are subject to change after review and audit of the
Companys financial statements.
About the Company
Encore Acquisition Company is engaged in the acquisition and development of oil and natural gas
reserves from onshore fields in the United States. Since 1998, Encore has acquired producing
properties with proven reserves and leasehold acreage and grown the production and proven reserves
by drilling, exploring, reengineering or expanding existing waterflood projects, and applying
tertiary recovery techniques.
Additional Information
As previously announced on November 1, 2009, Encore entered into a definitive merger
Page 2 of 3
agreement with Denbury Resources Inc. (Denbury) pursuant to which Denbury will acquire Encore
(the transaction). The combined company will continue to be known as Denbury Resources Inc. and
will be headquartered in Plano, Texas. The Boards of Directors of both companies have unanimously
approved the merger agreement, and each has recommended approval of the transaction to its
respective stockholders. Completion of the transaction is subject to the approval of both Denbury
and Encore stockholders, regulatory approvals, and other customary conditions. The transaction is
expected to close in the first quarter of 2010.
In connection with the transaction, Denbury and Encore will file a joint proxy statement/prospectus
and other documents with the Securities and Exchange Commission (SEC). Investors and security
holders are urged to carefully read the definitive joint proxy statement/prospectus when it becomes
available because it will contain important information regarding Denbury, Encore, and the
transaction.
A definitive joint proxy statement/prospectus will be sent to stockholders of Denbury and Encore
seeking their approval of the transaction. Investors and security holders may obtain a free copy of
the definitive joint proxy statement/prospectus (when available) and other documents filed by
Denbury and Encore with the SEC at the SECs website, www.sec.gov. The definitive joint proxy
statement/prospectus (when available) and such other documents relating to Denbury may also be
obtained free-of-charge by directing a request to Denbury, Attn: Investor Relations, 5100 Tennyson
Parkway, Suite 1200, Plano, Texas 75024, or from Denburys website, www.denbury.com. The definitive
joint proxy statement/prospectus (when available) and such other documents relating to Encore may
also be obtained free-of-charge by directing a request to Encore, Attn: Bob Reeves, 777 Main
Street, Suite 1400, Fort Worth, Texas 76102, or from Encores website, www.encoreacq.com.
Denbury, Encore, and their respective directors and executive officers may, under the rules of the
SEC, be deemed to be participants in the solicitation of proxies in connection with the proposed
transaction. Information concerning the interests of the persons who may be participants in the
solicitation will be set forth in the joint proxy statement/prospectus when it becomes available.
Contacts
Encore Acquisition Company, Fort Worth, TX
Encore Acquisition Company, Fort Worth, TX
Bob Reeves, Chief Financial Officer
|
Kim Weimer, Investor Relations | |
817-339-0918
|
817-339-0886 | |
rcreeves@encoreacq.com
|
kweimer@encoreacq.com |
Page 3 of 3