Reserves and Resources - Operations - Birchcliff Energy

Reserves and Resources

Birchcliff Plant

2016 Independent Reserves Evaluation

Birchcliff retained two independent qualified reserves evaluators, Deloitte and McDaniel, to evaluate and prepare reports on 100% of Birchcliff’s light crude oil and medium crude oil (combined), conventional natural gas, shale gas and NGLs reserves. Deloitte evaluated all of Birchcliff’s properties other than the Gordondale Assets, representing approximately 76% of the assigned total proved plus probable reserves and 73% of the total proved plus probable future net revenue discounted at 10%. McDaniel evaluated the reserves attributable to the Gordondale Assets, representing approximately 24% of the assigned total proved plus probable reserves and 27% of the total proved plus probable future net revenue discounted at 10%.

The reserves data set forth below at December 31, 2016 is based upon the evaluation by Deloitte with an effective date of December 31, 2016 as contained in the report of Deloitte dated February 3, 2017 (the “2016 Deloitte Reserves Report”) and the evaluation by McDaniel with an effective date of December 31, 2016 as contained in the report of McDaniel dated February 8, 2017 (the “2016 McDaniel Reserves Report”), which are contained in the consolidated report of Deloitte with an effective date of December 31, 2016 (the “2016 Consolidated Reserves Report”). Deloitte prepared the 2016 Consolidated Reserves Report by consolidating the properties evaluated by Deloitte in the 2016 Deloitte Reserves Report with the properties evaluated by McDaniel in the 2016 McDaniel Reserves Report, in each case using Deloitte’s forecast price and cost assumptions effective December 31, 2016 (the “2016 Deloitte Price Forecast”). Hedging gains and losses have been incorporated into the Consolidated Reserves Report.

Deloitte also prepared an evaluation of Birchcliff’s reserves effective December 31, 2015 (the “2015 Deloitte Reserves Report”) and reserves data contained herein at December 31, 2015 is based upon such report. The price forecast used in such evaluation was Deloitte’s forecast price and cost assumptions effective December 31, 2015 (the “2015 Deloitte Price Forecast”).

At December 31, 2016, Birchcliff's reserves evaluators estimated that Birchcliff had 880.5 MMboe of proved plus probable reserves and 572.9 MMboe of proved reserves. Birchcliff’s proved plus probable reserves are comprised of 81% shale gas, 2% conventional natural gas, 7% light crude oil and medium crude oil (combined) and 10% NGL.