Razor Energy Corp. Announces Significant Increases in 2017 Year-End Reserves and Net Asset Value

CALGARY, Alberta, Feb. 15, 2018 (GLOBE NEWSWIRE) — Razor Energy Corp. (“Razor” or the “Company”) (TSXV:RZE) is pleased to provide a summary of its 2017 year-end reserves evaluation.

The highlights and reserves summary below sets forth Razor’s gross reserves as at December 31, 2017, as evaluated by Sproule Associates Limited (“Sproule”) in an independent report (the “Sproule Report”). The figures in the following tables have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserve information as required under NI 51-101 will be included in the Company’s annual information form which will be filed on SEDAR on or before March 31, 2018.

Razor’s 2017 annual audited consolidated financial statements have not been completed. Financial representations in this news release are management’s estimates and are subject to audit and may be subject to change.

HIGHLIGHTS

• Total reserve values on a proved developed producing basis (“PDP”) discounted at 10% (“NPV10”) before tax were $178.3 million, which represents an increase of 112% over year end 2016.
• Total PDP reserve volumes were 11,910 Mboe (90% oil and liquids), which represents an increase of 55% over year end 2016.
• Total proved (“1P”) reserves were 15,072 Mboe and total proved plus probable (“2P”) reserves were 20,326 Mboe, which represent increases of 49% and 62%, respectively, over year end 2016.
• The Company’s reserve life index⁽³⁾ is 6.8 years for PDP, 8.6 years for 1P and 11.6 years for 2P reserves based on December 2017 average field-estimated production of 4,782 boepd.
• Razor’s reserve replacement ⁽¹⁾ was 360% of PDP, 420% of 1P, and 660% of 2P.

Notes:

2017 INDEPENDENT RESERVES EVALUATION

Sproule conducted an independent reserves evaluation effective December 31, 2017, which was prepared in accordance with definitions, standards and procedures contained in the COGE Handbook and in NI 51-101. The reserves evaluation was based on Sproule forecast pricing and foreign exchange rates at December 31, 2017 as outlined herein.

Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without the inclusion of any royalty interest) unless otherwise noted.

RESERVES SUMMARY

Summary of Gross Oil and Gas Reserves as of December 31, 2017^{(1), (2), (3), (4)}

Net Present Value of Future Net Revenues Before Income Taxes Discounted at (% per Year) (M$)

Notes:

NET ASSET VALUE⁽¹⁾

Net asset value, including estimated January 31, 2018 cash and working capital was:

• $9.60 /share on a PDP basis discounted at 10%, before tax and;
• $15.10 /share on a 2P basis discounted at 10%, before tax.⁽²⁾

Notes:

Summary of Pricing and Inflation Rate Assumptions – Forecast Prices and Costs

The forecast cost and price assumptions assume increases in wellhead selling prices and include inflation with respect to future operating and capital costs.  Crude oil and natural gas benchmark reference pricing, inflation and exchange rates utilized by Sproule as at December 31, 2017 were as follows:

Reconciliation of Company Gross Reserves By Principal Product Type^{(1), (2)}

The following table sets forth the reconciliation of the Company’s reserves at Forecast Prices and Costs:

Notes:

Future Development Costs

The following table sets forth development costs deducted in the estimation of Razor’s future net revenue attributable to the reserve categories noted below:

The future development costs are estimates of capital expenditures required in the future for Razor to convert proved developed non-producing reserves and probable reserves to proved developed producing reserves.  The undiscounted future development costs are $12.0 million for proved reserves and $55.1 million for proved plus probable reserves (in each case based on forecast prices and costs).

ABOUT RAZOR

Razor is a publicly-traded junior oil and gas development and production company headquartered in Calgary, Alberta, concentrated on acquiring, and subsequently enhancing, producing oil and gas properties primarily in Alberta. The Company is led by experienced management and a strong, committed Board of Directors, with a long term vision of growth focused on efficiency and cost control in all areas of the business.

Razor started operations in the first quarter of 2017, through an acquisition of producing assets in the Swan Hills area. In the second quarter of 2017, Razor added to its asset base with the acquisition of complementary assets in the Kaybob area. In the fourth quarter of 2017 and first quarter of 2018, Razor consolidated working interest in certain units in the Kaybob area.

This portfolio of predominantly light oil assets provides a foundation for strong shareholder return through abundant low risk operations. Razor plans to concurrently grow Swan Hills and Kaybob, and execute on similar acquisitions, using its experience to extract upside value.

Razor is a pivotal leading-edge enterprise, balancing creativity and discipline, focused on growing an enduring energy company.

Razor currently trades on TSX Venture Exchange under the ticker “RZE”.

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