VANCOUVER, BC and TULSA, OK, May 4, 2017 – Jericho Oil Corporation (“Jericho”) (TSX-V: JCO; OTC: JROOF), announces the results of its 2016 year-end reserves evaluation of its Kansas and Oklahoma properties as prepared by Cawley, Gillespie & Associates, Inc. (“CGA”), the Company’s independent reserves evaluator. The evaluation was prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).
Highlights of the Reserve Report (all dollar amounts in $USD):
Jericho for the year ending December 31, 2016 achieved significant reserve value growth (all dollar amounts are the Present Value of future cash flows discounted at 10% before tax derived from YE2016 Independent Reserve Report using forecast pricing, $USD):
¹ Replacement ratio, a non-IFRS financial measure, is an indicator of a company’s ability to replace its production and grow reserves, calculated as the sum of the reserve additions from defined sources divided by production for the corresponding period.
² Recycle ratio, a non-IFRS financial measure, represents the cash earned per boe produced (the numerator) versus the cost of getting that boe out of the ground (the denominator). It serves as a proxy for a company’s return on capital over a defined period of time.
³ The Company deployed approximately $3.03mm on exploration costs plus Proved Property Acquisition Costs plus Development Costs which yielded an increase in year-over-year Proved Develop reserves of approximately 699k barrels of oil equivalent.
4 Net debt as defined by the Company’s credit agreement as of 12.31.16; Total debt of approximately $2.48mm less cash on hand of approximately $3.75mm
Note: Barrels of oil equivalent (“boe”) amounts have been calculated using a conversion ratio of six thousand cubic feet (6 mcf) of natural gas to one barrel (1 bbl) of crude oil. The boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Allen Wilson, CEO of Jericho Oil, stated, “We continued to execute on Jericho’s growth strategy throughout the prolonged oil price downturn resulting in increased production and reserves, the main drivers of our Company’s intrinsic value. We increased Total Proved reserves NPV-10 by over 75%. Our current asset base is producing strong field-level cash margins at current oil prices and have significant development optionality.”
Below, please find the charts outlining the Present Value and Per Barrel Reserves summary of Jericho’s asset base in addition to its net asset value and operating netback calculations:
About Jericho Oil Corporation
Jericho is a growth-oriented oil and gas company engaged in the acquisition, exploration, development and production of overlooked and undervalued oil properties in the Mid-Continent. For more information, please visit www.jerichooil.com.
Cautionary Note Regarding Forward-Looking Statements: This news release includes certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual events and results to differ materially from Jericho’s expectations include risks related to the exploration stage of Jericho’s project; market fluctuations in prices for securities of exploration stage companies; and uncertainties about the availability of additional financing.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Director, Investor Relations
Director, Corporate Communications