Cuda Oil and Gas Inc. Reports Significant Increases in Oil and Liquid Reserves

CALGARY, Alberta, Feb. 19, 2020 (GLOBE NEWSWIRE) — Cuda Oil and Gas Inc. (“Cuda” or the “Company”) (TSXV: CUDA) releases the results of its 2019 year-end oil and gas reserves evaluation for Wyoming and Alberta.

In 2019, Cuda made significant progress in maturing and developing its major asset, the Barron Flats Shannon Secondary Recovery Unit (“SRRU”) in the Powder River Basin of Wyoming. Milestones included all regulatory approvals, commissioning of the Central Delivery Point Gas Facility (the “CDP”), commencement of injection and completion of multiple injection lines, completion of source natural gas tap with Tallgrass at GlenRock, Wyoming and start-up of the nine (9) mile high pressure pipeline system to supply gas to the miscible gas flood at the SSRU.  The Company has been successful in its execution of an eight (8) well infill program.  The Company disposed of all its assets and liabilities in Quebec in 2019 inclusive of all contingent resources.

Reserves Report Highlights

The independent Reserves Report prepared by Ryder Scott is effective as of December 31, 2019 (“2019 Reserves Report”).  All reserves information contained in this press release is based on the 2019 Reserves Report and includes reserves attributed to the BFU, the Cole Creek Unit and Alberta assets. Unless specifically indicated, all financial and operational information in this press release is based on estimates and is unaudited and accordingly, such financial information is subject to change based on the results of the Company’s audit.

Proven Developed (“PDP”) and Proved Non-Producing (“PNP”) Reserves

• The Company’s PDP + PNP reserves grew 108% over 2018 reserves to 3,189 Mboe (79% oil and liquids).
• NPV10 of $40.9 Million or $1.13 per basic common share.
• Reserve Life Index (“RLI”) based on 4^th quarter, 2019 production of 12.2 years.

Total Proved Reserves (“1P”)

• The Company’s 1P reserves grew 54% over 2018 reserves, to 7,599 Mboe (87% oil and liquids).
• NPV10 of $95.0 Million or $2.61 per basic common share.
• Future development costs of $50.3 Million.
• RLI of 29.1 years.

Proved plus Probable Reserves (“2P”)

• The Company’s 2P reserves grew 2% over 2018 reserves, to 14,872 Mboe (89% oil and liquids).
• NPV10 of $178.2 Million or $4.90 per basic common share.
• Future development costs of $99.0 Million.
• RLI of 57.0 years.

Oil and Gas Reserves

The 2019 Reserve Report represents Cuda’s oil and gas properties in Alberta and Wyoming and was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51 – 101”) by Ryder Scott.  The following table summarizes certain information contained in the 2019 Reserve Report:

Reserves Category

Reserve Category

About Cuda Oil and Gas Inc.

Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long-term focus on large, light oil resource- based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.

For further information please contact:

Glenn Dawson
President and Chief Executive Officer
Cuda Oil and Gas Inc.
(403) 454-0862

Forward-Looking Information

This news release contains forward-looking statements. All statements other than statements of historical fact included in this news release, are forward-looking statements that involve various risks and uncertainties and are based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. In particular, forward-looking information included in this news release includes: (i) Cuda’s exploration and development plans, which assume accuracy of technical and geological information and analysis and may be impacted by unscheduled maintenance, labour and contractor availability; (ii) future development costs and reserve life, which assume foreign exchange rates and accuracy of production estimates, and may be impacted by unexpected maintenance, the need to hire external resources and accelerated capital plans; and (iii) reserves which are forward-looking statements by their nature involving the implied assessment that the reserves can be profitably produced, and may be impacted by energy prices, future drilling results and operating costs. Risk factors that could prevent forward looking statements relating to Cuda and its operating activities from being realized include ongoing permitting requirements, the actual results of current exploration and development activities, operational risks, risks associated with drilling and completions, uncertainty of geological and technical data, market conditions, the availability and nature of alternative sources of energy, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of oil and natural gas. Although Cuda has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Oil and Gas Advisories

This news release contains metrics commonly used in the oil and natural gas industry, such as “future development costs”, “net asset value” and “reserve life index”. These oil and gas metrics have been prepared by management and do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this news release to provide readers with additional measures to evaluate Cuda’s performance and to compare Cuda’s operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this news release, should not be unduly relied upon.

Future development costs are estimates of capital expenditures required in the future for the Company to convert proved developed non-producing reserves and probable reserves to proved developed producing reserves.

Reserve Life Index or RLI is calculated based on the amount for the relevant reserves category, divided by current production.

“BOEs” may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.