Chinook Energy Inc. Announces its December 31, 2010 Reserves

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CALGARY, ALBERTA--(Marketwire - March 1, 2011) - Chinook Energy Inc. ("Chinook" or the "Company") (TSX:CKE) today announced the results of its year-end reserve evaluations effective December 31, 2010 as prepared by its independent evaluators.

The four evaluators, which were largely responsible for the previous evaluations of the same assets, have evaluated all of Chinook's crude oil, NGL and natural gas reserves in accordance with National Instrument 51-101. The price forecast at December 31, 2010 of McDaniel & Associates Consultants Ltd. ("McDaniel") was used to determine all estimates of future net revenue (also referred to as net present value or NPV). Chinook's Reserves Committee and Board of Directors have reviewed and approved the evaluations prepared by the evaluators.

Chinook's audit of its 2010 annual consolidated financial statements is not yet complete and accordingly all financial amounts referred to in this news release are unaudited and represent management's estimates. Readers are advised that these financial estimates are subject to audit and may be subject to change as a result.

2010 Operational Highlights

Chinook's 2010 operated drilling program was dedicated to delineating light oil discoveries and testing the potential of large scale resource opportunities in Canada and Tunisia. The drilling program consisted of 36 (20.5 net) wells of which 24 were operated and 12 were non-operated wells. The results are outlined in the table below:

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Wells Drilled                                                               
Year ended                                                                  
 December 31,                                                               
 2010                  Tunisia              Canada              Total       
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                     Gross       Net     Gross       Net     Gross       Net
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Exploration                                                                 
  Oil                 1.00      0.65      8 00      4.11      9.00      4.76
  Gas                    -         -      4.00      1.75      4.00      1.75
  Dry                 1.00      0.35         -         -      1.00      0.35
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                      2.00      1.00     12.00      5.86     14.00      6.86
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Development                                                                 
  Oil                 2.00      0.91     15.00      9.79     17.00     10.70
  Gas                    -         -      4.00      2.19      4.00      2.19
  Dry                    -         -      1.00      0.75      1.00      0.75
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                      2.00      0.91     20.00     12.73     22.00     13.64
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Total                 4.00      1.91     32.00     18.59     36.00     20.50
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Chinook's average daily production for fiscal 2010 was 9,795 barrels of oil equivalent per day. Production for the last half of 2010 was 15,721 barrels of oil equivalent per day and for the fourth quarter was 15,354 barrels of oil equivalent per day. Projected cash flow from operations (before changes in non-cash working capital) for 2010 is estimated at $52.0 million or $0.32 per weighted average basic common share outstanding (unaudited).

2010 Reserves Summary

2010 was an active acquisition year for the Company which saw the composition of its assets change from strictly international to a new domestic base and a revised international focus. In Canada, Chinook completed two material property acquisitions, several minor asset dispositions and completed the acquisition of Iteration Energy Ltd. Internationally, the Company completed an acquisition of additional working interest in the Remada project, a corporate purchase that brought the Company its first significant production and exposure to the prolific Acacus oil play in Southern Tunisia, and divested of its equity interest in the North Sea assets. As a result, 2009 reserves are not comparative.

--  Proved reserves totaled 37.4 million barrels of oil equivalent. The
    proved reserve life index ("RLI") is 6.6 years using fourth quarter 2010
    production. 
--  Proved plus probable reserves totaled 62.5 million barrels of oil
    equivalent. The proved plus probable RLI is 11.1 years using fourth
    quarter 2010 production. 
--  Proved developed producing reserves represented 71.6 percent of proved
    reserves and 42.9 percent of proved plus probable reserves as at
    December 31, 2010. 
--  Discovered Petroleum Initially in Place ("DPIIP") associated with the
    Bir Ben Tartar (TT) discovery on the Remada permit in Tunisia is
    estimated to be 297 million barrels of oil. Proven and probable reserves
    net to the Company of 3.6 million barrels of oil represents the 39
    percent Contractor's share of the 9.25 million barrels of oil
    recoverable from the 23 percent of DPIIP to which proven and probable
    reserves have been assigned. In addition, possible reserves of 2.07
    million barrels of oil and a Best Case Contingent Resource estimate of
    8.37 million barrels of oil recoverable are attributable to Chinook's
    interest in a scenario with pool recovery of 11 percent of DPIIP. (1, 2)
--  The all-in cost to add proved reserves was $19.63 per barrel of oil
    equivalent, and for adding proved plus probable reserves was $14.60 per
    barrel of oil equivalent. The all-in calculation reflects the result of
    Chinook's $697.5 million capital investment program as it takes into
    account the effect of acquisitions, dispositions, revisions plus the
    change in future development costs. 
--  The proved finding and development cost, as per NI 51-101 requirements,
    was $29.18 per barrel of oil equivalent and the proved plus probable
    finding and development cost, as per NI 51-101 requirements, was $21.57
    per barrel of oil equivalent. The change in future development costs
    ("FDC") was included in the calculation and the effect of acquisitions,
    divestitures and revisions was excluded. 
--  The net asset value amounted to $1.08 billion which results in the
    estimated net asset value per diluted share (being 217.5 million shares)
    at December 31, 2010, being $4.94 per share based on the net present
    value of proved and probable reserves, discounted at 10 percent before
    tax and after deducting year end total net debt and adding an estimated
    value for undeveloped land in Canada. On an after tax basis, with a
    similar 10 percent discount rate, the net asset value is $777.5 million
    or $3.57 per diluted share. 
--  Future development costs were $168.6 million on a proved basis and
    $337.8 million on a proved plus probable basis. 
--  The Company established a recycle ratio on a proven plus probable
    reserve basis, before commodity price contracts, of 1.1 times in Canada
    and 3.9 times in Tunisia. 
Notes:
1.  "Discovered Petroleum Initially-In-Place" (equivalent to discovered
    resources) is defined in the Canadian Oil and Gas Evaluation Handbook as
    that quantity of petroleum that is estimated, as of a given date, to be
    contained in known accumulations prior to production. The recoverable
    portion of discovered petroleum initially-in-place includes production,
    reserves, and contingent resources; the remainder is unrecoverable.
    "Contingent Resources" are defined in the COGE Handbook as those
    quantities of petroleum estimated 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. Contingencies include
    factors such as economic, legal, environmental, political, and
    regulatory matters, or a lack of markets. It is also appropriate to
    classify as contingent resources the estimated discovered recoverable
    quantities associated with a project in the early evaluation stage. The
    Contingent Resources estimates and the DPIIP estimates are estimates
    only and the actual results may be greater than or less than the
    estimates provided herein. There is no certainty that it will be
    commercially viable to produce any portion of the resources except to
    the extent identified as proved or probable reserves. Best Case
    Estimate: This is considered to be the best 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. If probabilistic methods are used, there should be at least a
    50 percent probability (P50) that the quantities actually recovered will
    equal or exceed the best estimate. 
2.  Possible reserves are those additional reserves that are less certain to
    be recovered than probable reserves. There is a 10 percent probability
    that the quantities actually recovered will equal or exceed the sum of
    proved plus probable plus possible reserves. 
The independent evaluators of the Company's year-end reserves are as 
follows:
--  McDaniel & Associates Consultants Ltd. ("McDaniel") evaluated all of the
    Canadian properties except Grande Prairie and the Northeast gas assets
    in Alberta, representing 52 percent of the Company's assets; 
--  GLJ Petroleum Consultants Ltd. ("GLJ") evaluated certain Canadian
    properties including the Grande Prairie and Northeast gas assets in
    Alberta, representing 21 percent of the Company's assets; 
--  InSite Petroleum Consultants Ltd. ("InSite") evaluated all of the
    Tunisia interests except Cosmos, representing 19 percent of the
    Company's assets; and 
--  Sproule International Limited ("Sproule") evaluated Comos in Tunisia,
    representing eight percent of the Company's assets. 
Reserves Breakdown (Company interest before royalties) (1) 
(December 31, 2010, escalated price forecast)
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(mboe)                                                       2010       2009
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Proved Producing                                                            
Canada                                                     26,224          -
Tunisia                                                       555         92
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Total proved producing                                     26,780         92
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Proved                                                                      
Canada                                                     31,283          -
Tunisia                                                     6,133      3,819
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Total proved                                               37,416      3,819
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Proved Plus Probable Additional                                             
Canada                                                     45,803          -
Tunisia                                                    16,655     12,438
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Total proved plus probable additional                      62,459     12,438
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Note:
(1) Columns may not add due to rounding.
Gross Company Interest Reserves as at December 31, 2010 (1)
(Before deduction of royalties payable, not including royalties receivable)
(December 31, 2010, escalated price forecast)
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                               Light     Heavy                      6:1 Oil
                           Crude Oil Crude Oil Sales Gas     NGL Equivalent
                              (mbbls)   (mbbls)    (mmcf) (mbbls)     (mboe)
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Proved producing               6,168       336   107,669   2,332     26,780
Proved non-producing           1,095        60    12,767     183      3,465
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Total proved developed         7,263       396   120,436   2,515     30,245
Proved undeveloped             5,225         -    10,566     184      7,170
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Total proved                  12,487       396   131,002   2,698     37,416
Probable additional           13,479       162    61,174   1,207     25,043
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Total proved plus probable    25,967       558   192,176   3,905     62,459
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Note:
(1) Columns may not add due to rounding.
Gross Company Reserve Reconciliation for 2010 (1)
(Gross company interest reserves before deduction of royalties payable)
----------------------------------------------------------------------------
                                              6:1 Oil Equivalent (mboe)     
                                                                 Proved Plus
                                       Total Proved     Probable    Probable
----------------------------------------------------------------------------
December 31, 2009 - opening balance           3,819        8,619      12,438
Additions and extensions                      1,730        1,189       2,920
Improved performance                            126            6         132
Discoveries                                     496          106         602
Acquisitions                                 34,784       14,738      49,522
Dispositions                                      -            -           -
Technical revisions                              35          386         421
Production                                  (3,575)            -     (3,575)
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December 31, 2010 - closing balance          37,416       25,043      62,459
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Note:
(1) Columns may not add due to rounding. 
Consolidated 
Net Present Value Summary (before tax) as at December 31, 2010 
(December 31, 2010, escalated price forecast) 
Benchmark oil and NGL prices used are adjusted for quality of oil or NGL
produced and for transportation costs. The calculated NPVs include a
deduction for estimated future well abandonment costs and drilling royalty
credits earned and expected to be claimed in Canada in the first quarter of
2011 have been deducted against royalties.
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                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing        709,965     550,698    455,489    391,345    344,932
Proved non-                                                                 
 producing              109,368      83,672     66,739     54,997     46,463
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Total proved                                                                
 developed              819,332     634,371    522,227    446,341    391,396
Proved undeveloped      207,347     161,933    129,166    104,435     85,187
----------------------------------------------------------------------------
Total proved          1,026,678     796,304    651,393    550,776    476,582
Probable                                                                    
 additional             996,771     702,175    534,223    423,274    344,235
----------------------------------------------------------------------------
Total proved plus                                                           
 probable             2,021,450   1,498,479  1,185,615    974,049    820,816
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Canada
Net Present Value Summary (before tax) as at December 31, 2010
(December 31, 2010, escalated price forecast)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing        680,140     523,636    430,707    368,456    323,633
Proved non-                                                                 
 producing               78,615      59,144     46,582     38,027     31,892
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Total proved                                                                
 developed              758,755     582,780    477,289    406,483    355,525
Proved undeveloped       60,440      44,589     34,088     26,750     21,415
----------------------------------------------------------------------------
Total proved            819,194     627,369    511,377    433,233    376,939
Probable                                                                    
 additional             466,310     280,051    191,441    141,202    109,529
----------------------------------------------------------------------------
Total proved plus                                                           
 probable             1,285,505     907,420    702,818    574,434    486,468
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Tunisia
Net Present Value Summary (before tax) as at December 31, 2010
(December 31, 2010, escalated price forecast)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing         29,825      27,062     24,782     22,888     21,299
Proved non-                                                                 
 producing               30,753      24,528     20,156     16,970     14,571
----------------------------------------------------------------------------
Total proved                                                                
 developed               60,577      51,590     44,938     39,858     35,871
Proved undeveloped      146,907     117,345     95,078     77,685     63,772
----------------------------------------------------------------------------
Total proved            207,484     168,935    140,017    117,543     99,642
Probable                                                                    
 additional             530,461     422,124    342,782    282,072    234,706
----------------------------------------------------------------------------
Total proved plus                                                           
 probable               735,945     591,059    482,798    399,615    334,348
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Consolidated
Net Present Value Summary (after tax) as at December 31, 2010
(December 31, 2010, escalated price forecast)
----------------------------------------------------------------------------
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                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing        654,562     509,870    422,997    364,213    321,507
Proved non-                                                                 
 producing               77,340      60,602     49,421     41,594     35,836
----------------------------------------------------------------------------
Total proved                                                                
 developed              731,901     570,472    472,419    405,807    357,343
Proved undeveloped      150,442     116,092     91,026     71,966     57,055
----------------------------------------------------------------------------
Total proved            882,344     686,564    563,445    477,773    414,398
Probable                                                                    
 additional             639,137     437,202    324,563    251,969    201,341
----------------------------------------------------------------------------
Total proved plus                                                           
 probable             1,521,480   1,123,766    888,008    729,742    615,739
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Canada
Net Present Value Summary (after tax) as at December 31, 2010
(December 31, 2010, escalated price forecast)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing        642,122     498,447    412,454    354,417    312,346
Proved non-                                                                 
 producing               58,289      44,833     36,035     29,997     25,626
----------------------------------------------------------------------------
Total proved                                                                
 developed              700,411     543,280    448,488    384,414    337,972
Proved undeveloped       42,380      30,046     21,894     16,220     12,112
----------------------------------------------------------------------------
Total proved            742,791     573,326    470,382    400,633    350,083
Probable                                                                    
 additional             347,175     208,583    142,562    105,129     81,549
----------------------------------------------------------------------------
Total proved plus                                                           
 probable             1,089,965     781,909    612,944    505,762    431,632
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Tunisia
Net Present Value Summary (after tax) as at December 31, 2010
(December 31, 2010, escalated price forecast)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Discounted Discounted Discounted Discounted
                                         at         at         at         at
($ thousands)      Undiscounted          5%        10%        15%        20%
----------------------------------------------------------------------------
Proved producing         12,440      11,424     10,544      9,796      9,161
Proved non-                                                                 
 producing               19,051      15,769     13,387     11,597     10,210
----------------------------------------------------------------------------
Total proved                                                                
 developed               31,491      27,192     23,931     21,393     19,372
Proved undeveloped      108,062      86,046     69,132     55,746     44,943
----------------------------------------------------------------------------
Total proved            139,553     113,238     93,063     77,139     64,315
Probable                                                                    
 additional             291,962     228,619    182,001    146,840    119,792
----------------------------------------------------------------------------
Total proved plus                                                           
 probable               431,515     341,857    275,064    223,979    184,107
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McDaniel & Associates Consultants Ltd. Escalating Price Forecast as at
December 31, 2010 (1)
----------------------------------------------------------------------------
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                                         Edmonton                          
                         WTI                Light   Henry Hub         AECO 
                   Crude Oil     Brent  Crude Oil Natural Gas  Natural Gas 
                    (US$/bbl) (US$/bbl) (Cdn$/bbl) (US$/mmbtu) (Cdn$/mmbtu) 
----------------------------------------------------------------------------
2011                   85.00     85.00      84.20        4.55         4.25 
2012                   87.70     87.20      88.40        5.30         4.90 
2013                   90.50     89.50      91.80        5.75         5.40 
2014                   93.40     92.30      94.80        6.30         5.90 
2015                   96.30     95.20      97.70        6.80         6.35 
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                       90.58     89.84      91.38        5.74         5.36 
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                                 Edmonton                                  
                               Condensate                                  
                              and Natural                            US/Cdn
                                 Gasoline    Propane       Butane  Exchange
                                (Cdn$/bbl) (Cdn$/bbl)   (Cdn$/bbl) (US$/Cdn)
----------------------------------------------------------------------------
2011                                88.20      44.40        67.90     0.975
2012                                90.40      47.70        71.20     0.975
2013                                93.90      50.30        74.00     0.975
2014                                96.90      52.70        76.40     0.975
2015                                99.90      55.00        78.70     0.975
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                                    93.86      50.02        73.64     0.975
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Note:
(1) Prices escalate at two percent per year after 2015.
Future Development Costs
----------------------------------------------------------------------------
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($ millions)                                                                
----------------------------------------------------------------------------
                                                              2010      2009
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Proved                                                                      
  Canada                                                      37.4         -
  Tunisia                                                    131.1     135.9
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Total proved                                                 168.6     135.9
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Proved Plus Probable                                                        
  Canada                                                      59.3         -
  Tunisia                                                    278.5     252.3
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Total proved plus probable                                   337.8     252.3
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Chinook's approved budget includes the drilling of 46.0 wells (27.3 net) in
Canada and 7.0 wells (3.7 net) in Tunisia in 2011.
NI 51-101 Finding and Development Costs
----------------------------------------------------------------------------
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Total Proved Finding and Development Cost                                   
($ thousands, except per unit amounts)                                  2010
----------------------------------------------------------------------------
Capital expenditures excluding acquisitions and dispositions                
 (unaudited)                                                          50,018
Net change from previously allocated future development                     
 capital                                                              19,107
----------------------------------------------------------------------------
Total capital including the net change in future capital              69,125
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Reserve additions excluding acquisitions, dispositions and                  
 revisions (mboe)                                                      2,369
Total proved finding and development costs (per boe)                   29.18
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Total Proved Plus Probable Finding and Development Cost                     
($ thousands, except per unit amounts)                                  2010
----------------------------------------------------------------------------
Capital expenditures excluding acquisitions and dispositions                
 (unaudited)                                                          49,151
Net change from previously allocated future development                     
 capital                                                              30,026
----------------------------------------------------------------------------
Total capital including the net change in future capital              79,177
----------------------------------------------------------------------------
Reserve additions excluding acquisitions, dispositions and                  
 revisions (mboe)                                                      3,670
Total proved plus probable finding and development costs (per               
 boe)                                                                  21.57
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All-In Finding, Development and Acquisition Costs
----------------------------------------------------------------------------
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Total Proved All-In Finding, Development and Acquisition Cost               
 Including                                                                  
FDC, Acquisitions, Dispositions and Revisions                               
($ thousands, except per unit amounts)                                  2010
----------------------------------------------------------------------------
Capital expenditures including acquisitions and dispositions                
 (unaudited) (1)                                                     697,482
Net change from previously allocated future development                     
 capital                                                              32,645
----------------------------------------------------------------------------
Total capital including the net change in future capital             730,127
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Reserve additions including acquisitions, dispositions and                  
 revisions (mboe)                                                     37,188
All-in total proved finding and development costs (per boe)            19.63
----------------------------------------------------------------------------
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Note: (1) Excludes non-cash costs, including Asset Retirement Obligations.
----------------------------------------------------------------------------
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Total Proved Plus Probable All-in Finding, Development and                  
 Acquisition Cost                                                           
Including FDC, Acquisitions, Dispositions and Revisions                     
($ thousands, except per unit amounts)                                  2010
----------------------------------------------------------------------------
Capital expenditures including acquisitions and                           
 dispositions (unaudited) (1)                                        697,482
Net change from previously allocated future development                     
 capital                                                              85,489
----------------------------------------------------------------------------
Total capital including the net change in future capital             782,972
----------------------------------------------------------------------------
Reserve additions including acquisitions, dispositions and                
 revisions (mboe)                                                     53,612
All-in total proved plus probable finding and development                   
 costs (per boe)                                                       14.60
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Note: (1) Excludes non-cash costs, including Asset Retirement Obligations.

Total exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs, generally will not reflect the total cost of reserve additions in that year.

Recycle Ratio

The recycle ratio is calculated as the netback per barrel divided by the finding and development costs (including acquisitions and dispositions). It is a measure of the profitability and efficiency of the Company.

----------------------------------------------------------------------------
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Total Proved                      Consolidated         Canada        Tunisia
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Operating netback before                                                    
 commodity price contracts                                                  
 ($/boe) (unaudited) (1)                 19.29          16.69          59.90
FD&A costs ($/boe) (unaudited)           19.63          19.99          14.89
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Recycle ratio                             1.0x           0.8x           4.0x
----------------------------------------------------------------------------
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Total Proved Plus Probable        Consolidated         Canada        Tunisia
----------------------------------------------------------------------------
Operating netback before                                                    
 commodity price contracts                                                  
 ($/boe) (unaudited) (1)                 19.29          16.69          59.90
FD&A costs ($/boe) (unaudited)           14.60          14.53          15.47
----------------------------------------------------------------------------
Recycle ratio                             1.3x           1.1x           3.9x
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Note: (1) Operating netback is calculated by deducting royalties and
          production expenses from revenue.

Corporate Net Asset Value

The Company's net asset value as of December 31, 2010, is detailed in the following table. This net asset value determination is a "point-in-time" measurement and does not take into account the possibility of Chinook being able to recognize additional reserves through successful future capital investment in its existing properties beyond those included in the 2010 year-end reserve reports.

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      Before Tax                 Before Tax
December 31, 2010                         NPV 10%                    NPV 15%
----------------------------------------------------------------------------
                          ($ thousands)  $/share ($ thousands)      $/share
----------------------------------------------------------------------------
Proved plus probable                                                        
 reserves NPV (1,2)           1,185,615     5.54       974,049         4.55
Undeveloped acreage (3)          53,096     0.25        53,096         0.25
Net debt (4)                   (169,966)   (0.79)     (169,966)       (0.79)
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Net asset value (basic) (5)   1,068,745     4.99       857,179         4.00
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Net asset value (diluted) (6) 1,075,080     4.94       863,514         3.97
----------------------------------------------------------------------------
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----------------------------------------------------------------------------
                                       After Tax                  After Tax
December 31, 2010                         NPV 10%                    NPV 15%
----------------------------------------------------------------------------
                          ($ thousands)  $/share ($ thousands)      $/share
----------------------------------------------------------------------------
Proved plus probable                                                        
 reserves NPV (1,2)            888,008      4.15      729,742          3.41
Undeveloped acreage (3)         53,096      0.25       53,096          0.25
Net debt (4)                  (169,966)    (0.79)    (169,966)        (0.79)
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Net asset value (basic) (5)    771,138      3.60      612,872          2.86
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Net asset value (diluted) (6)  777,473      3.57      619,207          2.85
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Notes:
1.  Evaluated by independent reserve evaluators as at December 31, 2010. Net
    present value of future net revenue does not represent the fair market
    value of the reserves. 
2.  Net present values for before and after tax are based on McDaniel's
    December 31, 2010 escalated price forecast. 
3.  Undeveloped land value has been calculated based on internal estimates
    of $100/acre for all Canadian lands. 
4.  Net debt as at December 31, 2010, including working capital deficit
    (estimated and unaudited). 
5.  Basic shares at December 31, 2010 total 214,187,681 common shares. 
6.  Diluted shares at December 31, 2010, total 217,475,731 common shares
    which include in-the-money options of 3,288,050 shares with proceeds of
    $6,335,363. 

Chinook's audited consolidated financial statements and its annual information form, which will include more detailed reserves information, will be filed on SEDAR (www.sedar.com) on or about March 30, 2011.

About Chinook Energy Inc.

Chinook is a Calgary-based public oil and gas exploration and development company that combines high quality gas-weighted assets in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.

Reader Advisory

Forward-Looking Statements

In the interest of providing shareholders and potential investors with information regarding Chinook, including management's assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this news release contains, without limitation, forward-looking statements pertaining to Chinook's recoverability of reserves and the values assigned thereof.

With respect to forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: future capital expenditure levels; future oil and natural gas prices and differentials between light, medium and heavy oil prices; future exchange rates and interest rates; Chinook's ability to obtain equipment in a timely manner to carry out development activities; Chinook's ability to market oil and natural gas successfully to current and new customers; the impact of increasing competition; the ability of Chinook to obtain financing on acceptable terms; and the ability of Chinook to add production and reserves through development and exploitation activities. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: failure to realize the anticipated benefits and synergies of the acquisitions; volatility in market prices for oil and natural gas; failure to complete planned operational activities; general economic conditions in Canada, the U.S. and globally; and the other factors described under "Risk Factors" in Appendix "F" to Iteration's management information circular and proxy statement dated May 29, 2010, available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release speak only as of the date hereof. Except as expressly required by applicable securities laws, Chinook does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Barrels of Oil Equivalent

Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Reserve Life Index

The reader is also cautioned that this news release contains the term reserve life index ("RLI"), which is not a recognized measure under GAAP. Management believes that this measure is a useful supplemental measure of the length of time the reserves would be produced over at the rate used in the calculation. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms such as net income determined in accordance with GAAP as a measure of performance. Chinook's method of calculating this measure may differ from other companies, and accordingly, they may not be comparable to measures used by other companies.



Matthew Brister
Chinook Energy Inc.
President and Chief Executive Officer
(403) 261-6883

L. Geoff Barlow
Chinook Energy Inc.
Vice-President, Finance and Chief Financial Officer
(403) 261-6883
www.chinookenergyinc.com