755 0 Kommentare High North Resources Ltd. Announces Update on Debentureholders' Meeting, Corporate Update and Update of Reserves Numbers From GLJ Petroleum Consultants Ltd.

CALGARY, ALBERTA--(Marketwired - May 5, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

High North Resources Ltd. (TSX VENTURE:HN) (the "Company" or "High North") is pleased to provide the following updates:

Debentureholders' Meeting Update

High North is pleased to announce that it has received an interim order of the Supreme Court of British Columbia dated May 4, 2015. The interim order provides for, among other things, the holding of an extraordinary meeting ("Meeting") of the holders ("Debentureholders") of its 12.00% convertible unsecured subordinated debentures ("Debentures") due April 4, 2015 to approve the previously announced arrangement ("Arrangement") under the Business Corporations Act (British Columbia) which will provide for, among other things, certain amendments to the Debentures. The TSX Venture Exchange has also conditionally approved the Arrangement.

The Meeting is scheduled to be held on June 4, 2015, at 10:00 a.m. (Mountain Daylight Time), at First Canadian Centre, Conference Centre, 350 - 7^th Avenue S.W., Calgary, Alberta, T2P 3N9. The record date for determining the Debentureholders entitled to receive notice of and vote at the Meeting is April 6, 2015.

In connection with the Meeting, High North has entered into support agreements ("Support Agreements") with certain Debentureholders. As at the date hereof, holders of approximately 77% of the principal amount of Debentures (the "Initial Consenting Debentureholders") have executed Support Agreements. Additional Debentureholders (together with the Initial Consenting Debentureholders, the "Consenting Debentureholders") may execute Support Agreements prior to the Meeting. Pursuant to the terms of the Support Agreements, each Consenting Debentureholder has agreed, subject to certain terms and conditions, to vote in favour of the Arrangement.

A copy of the form of Support Agreement will be filed under High North's profile on SEDAR at www.sedar.com.

The board of directors of High North has unanimously approved the Arrangement and recommends that Debentureholders vote in favour of the Arrangement.

High North intends to mail the Notice of Extraordinary Meeting and Management Information Circular, together with a form of proxy (collectively, the "Meeting Materials") to Debentureholders of record on or about May 7, 2015. The Meeting Materials will also be available on High North's SEDAR profile at www.sedar.com on the day of mailing.

Corporate Update

In connection with the expiry of the Management Agreement, Roger Bethell's term as Vice President, Exploration of the Company concluded, effective April 30, 2015. Mr. Bethell will continue to serve the Company in his capacity as a member of the board of directors of High North.

Reserves Update

High North is also pleased to announce that GLJ Petroleum Consultants Ltd. ("GLJ") has completed an independent reserves assessment and evaluation report dated April 14, 2015, and effective March 31, 2015 on the reserves attributed to the Company's Girouxville property, located in north-western Alberta, Canada (the "GLJ Report").

The GLJ Report was prepared in accordance with the requirements of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, with the net present value of future net revenue attributable to reserves based on GLJ's price deck as of April 1, 2015. The results of the GLJ Report update High North's previously filed Form 51-101F1 Statements of Reserves Data and Other Oil and Gas Information, dated January 23, 2015, and effective September 30, 2014.

Summary of Reserves (Forecast Prices and Costs)

The principal oil and gas assets of High North are located in Girouxville-McLean in the Peace River Arch area of north-western Alberta. The Company holds a 100% working interest in six wells and 9,600 hectares of leases. A multi-well battery has been installed and ongoing infrastructure construction is subject to obtaining additional financing. High North had drilled and completed five wells, all of which were on production by its fiscal year ended September 30, 2014. The sixth well was drilled during the three months ended December 31, 2014, and completed during February 2015. The first five wells have produced, however due to costly water handling and low commodity prices, three wells have been temporarily shut in. The sixth well is capable of production but is currently shut in until water handling facilities can be installed.

Summary of Oil Reserves

as at March 31, 2015

Forecast Prices and Costs

		Light & Medium Oil
Reserves category		Gross (Mbbls)⁽¹⁾	Net (Mbbls)
Proved
	Proved Producing	223	153
	Proved Developed Non-Producing	102	87
	Proved Undeveloped	411	335
Total Proved		736	575
Probable		728	558
Total Proved + Probable		1,464	1,133

Note:
⁽¹⁾	Mbbls means 1,000 barrels of oil.

Total Future Net Revenue

as at March 31, 2015

Forecast Prices and Costs

		Net Present Value of Future Revenue⁽¹⁾
		Before Income Taxes - Discounted at (%/year)						After Income Taxes - Discounted at (%/year)⁽²⁾
Reserves Category		0% (M$)	5% (M$)	10% (M$)	15% (M$)	20% (M$)		0% (M$)	5% (M$)	10% (M$)	15% (M$)	20% (M$)		Unit Value⁽³⁾ $/bbl⁽⁴⁾

Proved
	Proved Producing	4,441	3,602	3,000	2,553	2,211		4,441	3,602	3,000	2,553	2,211		19.61
	Proved Developed Non-Producing	431	263	128	17	(75	)	431	263	128	17	(75	)	1.47
	Proved Undeveloped	9,972	7,564	5,851	4,598	3,659		9,972	7,564	5,851	4,598	3,659		17.47
Total Proved		14,843	11,429	8,979	7,168	5,795		14,843	11,429	8,979	7,168	5,795		15.62
Probable		25,224	17,418	12,716	9,707	7,680		20,389	14,157	10,389	7,970	6,335		22.83
Total Proved + Probable		40,067	28,847	21,695	16,875	13,475		35,232	25,586	19,368	15,138	12,130		19.15


Notes:
⁽¹⁾	Net present value of future net revenue includes all resource income (sale of oil, gas, by-product reserves); processing of third party reserves; and other income.
⁽²⁾	Income taxes includes all resource income, appropriate income tax calculations and prior tax pools.
⁽³⁾	Calculated using net present value of future net revenue before deducting income taxes, discounted at 10 percent per year. Unit values are based on High North's net reserves.
⁽⁴⁾	bbl means barrel or barrels.

Total Future Net Revenue (Undiscounted)

as at March 31, 2015

Forecast Prices and Costs⁽¹⁾

Reserves Category	Revenue (M$)	Royalties (M$)	Operating Costs (M$)	Development Costs (M$)	Abandonment and Reclamation (M$)	Future Net Revenue Before Income Taxes (M$)	Income Taxes (M$)⁽²⁾	Future Net Revenue After Income Taxes (M$)
Proved	63,047	11,169	25,551	11,111	373	14,843	0	14,843
Probable	78,366	14,080	29,698	9,156	208	25,224	4,835	20,389
Proved + Probable	141,413	25,249	55,250	20,267	581	40,067	4,835	35,232


Notes:
⁽¹⁾	Future net revenue includes all resource income (sale of oil, gas, by-product reserves); processing of third party reserves; and other income.
⁽²⁾	Income taxes includes all resource income, appropriate income tax calculations and prior tax pools.

Future Development Costs

The following table sets out the total development costs deducted in the estimate of future net revenue attributable to total Proved Reserves and Proved + Probable Reserves using forecast prices and costs:

Canada (Alberta)	Proved Reserves (M$)	Proved + Probable Reserves (M$)
2015	2,135	2,135
2016	8,976	8,976
2017	--	9,156
2018	--	--
2019	--	--
2020	--	--
Remaining	--	--
Total (Undiscounted)	11,111	20,267
Total discounted (10%)	10,028	17,416

Future development costs are associated with reserves in the GLJ Report and do not necessarily represent High North's total capital budget. The Company has the following potential sources to fund development costs: cash flow generated from operations, debt, new equity issuances, and joint ventures, if appropriate. The current state of the oil and gas industry makes it difficult to access these sources and therefore the Company does not have the ability at this time to fund these future development costs. The Company believes that the costs associated with the sources of funding would not make any of the existing properties uneconomic or have a material impact on disclosed reserves or future net revenue.

Oil and Gas Properties and Wells

High North is in the initial stages of developing its lands for Montney oil and gas production. In April 2014, the Company purchased seven sections of land resulting in 20.25 contiguous sections prospective for Montney rights adjacent to its current production in section 2-76-21W5M. As of March 31, 2015, the Company owned 8,576 hectares of undeveloped land with potential Montney rights. The Company anticipates a minimum of four horizontal wells per section targeting Montney oil could be drilled on these prospective lands.

The Company's production as at March 31, 2015, remains stable at approximately 235 barrels of oil per day. Six wells have been drilled and completed by the Company with a 100% success rate. Currently, two wells are on production. The four shut-in wells are capable of commercial production. The Company anticipates that its full production capabilities will be realized once gas production is tied-in and a water handling facility is constructed. The Company's operations have recently been, and will continue to be, focused on both of these projects over the next few months.

The Alberta Energy Regulator has granted approval to High North to flare the associated gas production from the wells until August 1, 2015. Therefore, the Company is currently pursuing the installation of a power generation facility whereby the produced associated gas will be utilized as fuel gas, and the excess will be marketed to the electrical grid. The Company expects that it will then realize the revenue and cash flow for this gas production. In addition, the Company believes that its operating costs, specifically propane and diesel costs, will be significantly reduced with the gas coming on production.

In concert with the development of the gas production and power generation facility, the installation of a water handling and optimization facility is being explored. Once this facility is constructed, High North will be able to significantly reduce its operating costs by reducing both trucking and disposal expenses. High North anticipates that both the gas-to-power and water handling projects will be on-stream by mid-summer, 2015.

The following table sets forth the number of wells in which the Company held a working interest as at March 31, 2015:

		Oil Wells
		Gross	Net
Alberta, Canada
	• Producing	2.0	2.0
	• Non-Producing	4.0	4.0

Developed and Undeveloped Lands

The following table sets out the developed and undeveloped land holdings of High North as at March 31, 2015:

	Developed Hectares		Undeveloped Hectares		Expiring Hectares Within One Year
	Gross	Net	Gross	Net	Gross	Net
Alberta, Canada	1,024	1,024	8,576	8,576	6,656	6,656

Production Estimates

The following tables discloses, for six months from April 1, 2015 to September 30, 2015, the total working interest volume of production estimated by GLJ in the GLJ Report from gross proved reserves and gross probable reserves.

	Estimated 2015 Company Interest Daily Production (Total Proved)		Estimated 2015 Company Interest Daily Production (Total Probable)		Estimated 2015 Company Interest Daily Production (Total Proved + Probable)
Crude Oil Light & Medium (BOE/d)	240		53		293

Reserves Categories

"Company interest" means in relation to the Company's interest in production or reserves, its working interest (operating or non-operating) share, before deduction of royalty obligations, and including any royalty interests of the Company.

"gross" means:

in relation to the Company's interest in production or reserves, its "Company gross reserves", which is its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Company;
in relation to wells, the total number of wells in which the Company has an interest; and
in relation to properties, the total area of properties in which the Company has an interest;

"net" means in relation to the Company's interest in production or reserves after the deduction of royalties;

Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves;

Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Developed Reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g., when compared to the cost of drilling a well) to put the reserves on production. The developed category may be subdivided into producing and non-producing; and

Undeveloped Reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they are assigned.

High North is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. High North trades on the TSX Venture Exchange under the symbol HN.

Legal Advisories

Additional information about the Company is available under High North's profile on SEDAR at www.sedar.com.

Reader Advisory Regarding Forward-Looking Statements

Certain statements in this news release are "forward-looking statements" or "forward-looking information" (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Often, but not always, forward-looking statements or information may be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "projects" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. All statements other than statements of historic fact are forward-looking statements.

In particular, forward-looking statements or information include, without limitation, statements related to future capital expenditures, financing and capital activities, future commodity prices, reserves and resources estimates, development plans, production levels and sources of growth thereof, results of exploration activities, regulatory approvals, expectations and objectives for future operations. This news release contains forward-looking statements pertaining to, among other things, the following: the Meeting, including anticipated dates and the mailing of Meeting Materials and the execution of additional Support Agreements. In addition, statements relating to reserves and resources in this news release are deemed to be forward-looking statements because they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated, and that the reserves described can be profitable produced in the future.

Forward-looking statements are subject to a number of assumptions, risks and uncertainties normally incident to the exploration for and development and production of oil and gas which include, but are not limited to: imprecision of reserves and resources estimates, ultimate recovery of reserves, commodity prices, general economic, market and business conditions, industry capacity, competitive action by other companies, refining and market margins, the ability to produce and transport crude oil and natural gas to markets, weather and climate conditions, results of exploration and development drilling and other related activities, fluctuation in interest rates and foreign currency exchange rates, ability of suppliers to meet commitments, actions by governmental authorities, including increases in taxes, decisions or approvals of administrative tribunals, changes in environmental and other regulations, international political events and expected rates of return. More specifically, production may be affected by facility reliability, reservoir performance and natural decline rates, water handling and drilling progress. Capital expenditures may be affected by cost pressures associated with new capital projects, including labour and material supply, project management, drilling rig rates and availability and seismic costs.

In this news release the Company has made assumptions with respect to the following:

the ability of High North to obtain all required regulatory approvals to complete the Arrangement;
the ability of High North to obtain the required level of Debentureholder approval for the Arrangement;
prices for oil and natural gas;
oil and gas reserve and resource quantities and the discounted present value of future net cash flows from these reserves and the ultimate recoverability of reserves;
timing and amount of future production, forecasts of capital expenditures and the sources of financing thereof;
the amount, nature, timing and effects of capital expenditures;
plans for drilling wells and the timing and location thereof;
operating and other costs; and
business strategies and plans of management.

Although the Company believes that the expectations conveyed by the forward-looking information are reasonable based on information available to it on the date such forward-looking information was made, no assurances can be given as to future results, levels of activity and achievements. The Company's actual results could differ materially from those anticipated in these forward-looking statements if the assumptions underlying them prove incorrect, or if one or more of the uncertainties or risks described above materializes. Readers should not place undue importance or reliance on the forward-looking information and should not rely on the forward-looking information as of any date other than the date hereof. The forward-looking statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, without limitation: failure to obtain the necessary approvals for the Arrangement, or to otherwise satisfy the conditions of the Arrangement in a timely manner, or at all; and certain other risks detailed from time to time in High North's public disclosure documents, copies of which are available on High North's SEDAR profile at www.sedar.com.

Statements including forward-looking information are made as at the date they are given and, except as required by applicable law, High North does not intend, and does not assume any obligation, to update any forward-looking information, whether as a result of new information or otherwise. If the Company does update one or more statements containing forward-looking information, it is not obligated to, and no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

Reserves Advisory

High North's reserves estimates have been prepared and evaluated in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is at least a 90% probability that the quantities actually recovered will equal or exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. There is at least a 50% probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable reserves.

It should not be assumed that the estimates of future net revenues presented herein represent the fair market value of the reserves or resources. Future net revenue values, whether calculated without discount or using a discount rate, are estimated values only and do not represent fair market value. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The reserve estimates provided herein are estimates only and there is no assurance that the estimated reserves will be recovered. Actual oil reserves may be greater than or less than the estimates provided herein.

Barrels of Oil Equivalent ("BOE") Advisory

Certain natural gas volumes have been converted to BOE on the basis of one barrel to six thousand cubic feet. Any figure presented in BOE's may be misleading, particularly if used in isolation. The calculation of BOE's is based on a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil based on an energy equivalency conversion primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of six to one, utilizing a BOE conversion ratio of 6 thousand cubic feet: 1 barrel may be misleading as an indication of value.

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.