Our track record of value creation is based on the four metrics which management uses in evaluating our Company’s performance - these include reserves, production, cash flow and net asset value - all on a per share basis.
The success of our corporate business strategies are measured by these metrics that demonstrate consistent performance.
Year-end 2009 and 2010 proved plus probable reserves were prepared using forecast prices and costs. Prior to 2009, reserves were prepared using constant prices and costs.
Cash flow from operations is a non-GAAP measure that the Company considers key as it demonstrates the Company’s ability to fund capital investment and repay debt. The derivation of this measure is discussed in the Management’s Discussion and Analysis (“MD&A”).
Calculated as the net present value of future net revenue of the Company’s total proved plus probable reserves prepared using forecast prices and costs discounted at 10%, as reported in the Company’s AIF, with $300/acre added for core unproved property ($250/acre for core undeveloped land from 2005 to 2009, $75/acre for core undeveloped land for all years prior to 2005), less net debt and using year end common shares outstanding. Net debt is the Company’s long-term debt plus/minus the working capital deficit/surplus. Excludes Horizon SCO reserves prior to 2009. Future development costs and associated material well abandonment costs have been applied against the future net revenue.