Operations Overview
Manyberries Update
During the second half of 2023, HECO drilled and completed two exploratory wells on the
Saskatchewan Update
With the success realized to date at HECO's
Helium Contingent Resource Report Prepared by Independent Evaluator
HECO is also pleased to share summary estimates from its Contingent Resource Report prepared by
Estimated Company Share of Unrisked Helium Contingent Resources as of
Category / Level of Certainty | Gross (MMCF) (1),(2) |
Low Estimate | 22 |
Best Estimate | 44 |
High Estimate | 67 |
(1) Contingent resource volumes reported only correspond to the 09-04 well as the 10-08 well was unable to test at a stabilized economic rate. Recoveries noted here may not be representative of full pool development or the total pool gas initially-in-place (“GIIP”). The Contingent Resources have been risked to account for a 80% chance of commerciality.
(2) Contingent Resources include the working interest reserves before deductions of royalties payable to others and includes expected processing of five percent with a one percent helium concentration.
“I am pleased to share HECO’s first resource estimate from the McDaniel Report which demonstrates our progress to date in developing the emerging and exciting
Outlook
Building on HECO’s momentum exiting 2023, the Company remains committed to ongoing asset development, value creation and prudent capital allocation through 2024. With a healthy cash position of approximately
Additional Information and Cautionary Statements
- The resource is contingent on funding for development and production.
- There is uncertainty that the project will be commercially viable to produce any portion of the Contingent Resources.
- The estimates presented in this release are based on data and test results from one well. There is potential for future drilling activity to materially impact the estimated volumes based on additional geological data and production testing. Estimated pool volumes may increase or decrease in the future.
- The Contingent Resources estimated for 09-04 and offsetting locations relies on comparisons to analogous wells, and no production data is available from the well included in this estimate.
- The reader is cautioned that disclosure of helium in place volumes is not included in National Instrument 51-101 guidelines.
Information Regarding the Contingent Resources
The effective date of the Contingent Resource estimate is
This news release discloses estimates of the Company’s Contingent Resources. The Company defines Contingent Resources are those quantities of gas estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development but which are not currently considered to be commercially recoverable due to one or more contingencies. There is uncertainty that it will be commercially viable to produce any portion of the resources.
The resource estimates presented above are subject to certain risks and uncertainties, including those associated with the drilling and completion of future wells, limited available geological, prices of the various raw gases and geophysical data and uncertainties regarding the actual production characteristics of the reservoirs, all of which have been assumed for the preparation of the resource estimates.
The resources are classified as development pending.
Contingent Resources do not constitute, and should not be confused with, reserves. Contingent Resources are defined as those quantities estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. There is a range of uncertainty of estimated recoverable volumes. A low estimate (“1C”) is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate, which under probabilistic methodology reflects at least a 80% confidence level. A best estimate (“2C”) is considered to be a realistic estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate, which under probabilistic methodology reflects at least a 50% confidence level. A high estimate (“3C”) is considered to be an optimistic estimate. It is unlikely that the actual remaining quantities recovered will exceed the high estimate, which under probabilistic methodology reflects at least a 10% confidence level. There is uncertainty that it will be commercially viable to produce any portion of the resources.
All of the resources classified as contingent are considered to be discovered, and as such have been assigned a 100% chance of discovery but have however been risked for the chance of development. The chance of development is defined as the likelihood of a project being commercially viable and development proceeding in a timely fashion. Determining the chance of development requires taking into consideration each contingency and quantifying the risks into an overall development risk factor at a project level.
Contingent resources can be sub-classified based on project maturity. COGEH (Section 1.3.6 Project Maturity Sub-Classes) discusses what the typical progression is, as follows:
1) Initial assessment to confirm the reservoir as a known accumulation with the potential for development. During this process, the project maturity may be Development Unclarified while additional information, in particular test or pilot data, is being acquired. For conventional accumulations, this data-gathering stage may be a short time (e.g., with a drill stem test prior to rig release), but for unconventional accumulations, this may take considerable time, even years, and involve pilot tests; and
2) Once the appropriate information to pass beyond development unclarified has been collected and analyzed appropriately, a project may be classified as either:
- Development Pending, where resolution of the final conditions for development is being actively pursued (high chance of development). (If a project cannot be developed within a reasonable timeframe, consideration should be given to reclassification as development on hold); or
- Development On Hold, where there is a reasonable chance of development, but there are major non-technical contingencies to be resolved that are usually beyond the control of the operator; or
- Development Not Viable, where no further data acquisition or evaluation is currently planned and hence there is a low chance of development.
In general, contingencies which prevent Contingent Resources from being classified as reserves are grouped under three categories: economic contingencies, non-technical contingencies and technical contingencies. Economic contingencies are applicable only in the case of sub-economic Contingent Resources. As all of the Contingent Resources disclosed in this news release are classified as economic Contingent Resources, there are no economic contingencies in respect of such resources. Non-technical contingencies include factors such as required corporate or third party (such as joint venture partners) approvals, legal, environmental, political, social license and regulatory matters or a lack of infrastructure or markets. Technical contingencies are applicable where there is a technology currently under development that would be required to classify the Contingent Resources in question as reserves. None of HECO’s estimated Contingent Resources are subject to technical contingencies.
Significant positive factors relevant to the estimates include:
- commercial success of drilling
- corporate commitment to develop plays over a reasonable time frame;
- significant well control and offsetting economic well production;
- proximity to infrastructure for production growth and central market hubs; and
- low political risk as all reserves and resources are located in
North America .
Significant negative factors relevant to the estimates include:
- potential for low commodity prices impacting the economic viability and development of certain areas;
- access to and amount of capital required to develop resources at an acceptable cost;
- significant production growth and access to infrastructure capacity;
- development uncertainty relating to surface access matters.
Estimates of economic Contingent Resources are based on existing access to infrastructure capacity and the current regulatory frameworks in which HECO operates.
One hundred percent of the Contingent Resources disclosed in this news release are located in the
About
For further information please contact:
Telephone: +1 705-5076 ext. 1 Email: HECOinfo@5qir.com |
READER ADVISORIES
Forward Looking Statements
No securities regulatory authority has reviewed nor accepts responsibility for the adequacy or accuracy of the content of this news release.
This news release contains forward-looking statements and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this internal announcement are forward-looking statements that involve risks and uncertainties. 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 results to differ materially from the Company’s expectations include the failure to satisfy the conditions of the relevant securities exchange(s) and other risks detailed from time to time in the filings made by the Company with securities regulators. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company.
The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this internal announcement are expressly qualified by this cautionary statement. The forward-looking statements contained in this internal announcement are made as of the date of this internal announcement and the Company will update or revise publicly any of the included forward-looking statements as expressly required by applicable law.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM
IS DEFINED IN THE POLICIES OF THE CANADIAN SECURITIES EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE
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