Advantage Energy : Annual Information Form (2024 AIF Final)
AAV.TO
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ANNUAL INFORMATION FORM YEAR ENDED DECEMBER 31, 2024 MARCH 4, 2025
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TABLE OF CONTENTS
Page
GLOSSARY OF TERMS
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ABBREVIATIONS AND OIL AND GAS ADVISORIES
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CONVERSION
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FORWARD‐LOOKING STATEMENTS
7
GENERAL DEVELOPMENT OF THE BUSINESS
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DESCRIPTION OF OUR BUSINESS AND OPERATIONS
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STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION…………………………..………..…...17
DIRECTORS AND OFFICERS
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DIVIDEND POLICY
45
DESCRIPTION OF THE CORPORATION'S SECURITIES
45
PRICE RANGE AND TRADING VOLUME OF SECURITIES
47
ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER
48
LEGAL PROCEEDINGS
48
REGULATORY ACTIONS
48
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
48
MATERIAL CONTRACTS
48
INTEREST OF EXPERTS
48
AUDITORS, TRANSFER AGENT AND REGISTRAR
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AUDIT COMMITTEE INFORMATION
49
AUDIT SERVICE FEES
53
INDUSTRY CONDITIONS
53
RISK FACTORS
61
ADDITIONAL INFORMATION
93
APPENDICES
"A" - REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE
"B" - REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR "C" - AUDIT COMMITTEE CHARTER
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GLOSSARY OF TERMS
Selected Defined Terms
"ABCA" means the Business Corporations Act (Alberta), together with any or all regulations promulgated thereunder, as amended from time to time;
"Acquired Assets" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Charlie Lake and Montney Asset Acquisition";
"Acquisition" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Charlie Lake and Montney Asset Acquisition";
"Advantage" or the "Corporation" means Advantage Energy Ltd., a corporation amalgamated under the ABCA. All references to "Advantage" or the "Corporation", unless the context otherwise requires, are references to Advantage Energy Ltd. and its predecessors and subsidiaries;
"Board of Directors" or "Board" means the board of directors of Advantage;
"CCO" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History
"CGF" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History
- 2023 - Entropy Strategic Financing Agreement";
"Common Shares" means the common shares of Advantage;
"Conroy Area" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2023 - Conroy Acquisition";
"Credit Facilities" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Increase in Credit Facility";
"Debentures" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Bought Deal Financing";
"Entropy" means Entropy Inc., a corporation incorporated under the ABCA and a subsidiary of Advantage;
"IFRS" means International Financial Report Standards as issued by the International Accounting Standards Board;
"Indenture" has the meaning ascribed thereto under the heading "Description of the Corporation's Securities - Debentures";
"MOU" means memorandum of understanding;
"NCIB" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History
- 2022 - Normal Course Issuer Bid";
"NDA" means non‐disclosure agreement;
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"NI 52‐110" means National Instrument 52‐110 ‐ Audit Committees;
"NYMEX" means New York Mercantile Exchange;
"Offering" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Bought Deal Financing";
"OPEC" means the Organization of Petroleum Exporting Countries;
"Shareholders" means the holders from time to time of one or more Common Shares, as shown on the register of such holders maintained by the Corporation or by the transfer agent of the Common Shares, on behalf of the Corporation;
"Subscription Receipts" has the meaning ascribed thereto under the heading "General Development of the Business - Three Year History - 2024 - Bought Deal Financing";
"TSX" means the Toronto Stock Exchange; and
"U.S." means the United States of America.
Selected Defined Oil and Gas Terms
"abandonment and reclamation costs" means all costs associated with the process of restoring a property that has been disturbed by oil and gas activities to a standard imposed by applicable government or regulatory authorities;
"API" means the American Petroleum Institute;
"API gravity" means the API gravity expressed in degrees in relation to liquids, which is a measure of how heavy or light a petroleum liquid is compared to water. If a petroleum liquid's API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier than water and sinks. API gravity is thus a measure of the relative density of a petroleum liquid and the density of water and is used to compare the relative densities of petroleum liquids;
"COGE Handbook" means the "Canadian Oil and Gas Evaluation Handbook" maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter), as amended from time to time;
"conventional natural gas" means natural gas that has been generated elsewhere and has migrated as a result of hydrodynamic forces and is trapped in discrete accumulations by seals that may be formed by localized structural, depositional or erosional geological features;
"developed non‐producing reserves" are those reserves that either have not been on production, or have previously been on production, but are shut‐in, and the date of resumption of production is unknown;
"developed producing reserves" are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut‐in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty;
"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 (for example, when compared to the cost of drilling a well) to put the reserves on production. The developed category may be subdivided into developed producing reserves and developed non‐producing reserves;
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"development costs" means costs incurred to obtain access to reserves and to provide facilities for extracting, treating, gathering and storing the oil and gas from reserves. More specifically, development costs, including applicable operating costs of support equipment and facilities and other costs of development activities, are costs incurred to:
"exploration costs" means costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects that may contain oil and gas reserves, including costs of drilling exploratory wells and exploratory type stratigraphic test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to as "prospecting costs") and after acquiring the property. Exploration costs, which include applicable operating costs of support equipment and facilities and other costs of exploration activities, are:
"forecast prices and costs" means future prices and costs that are:
"future net revenue" means a forecast of revenue, estimated using forecast prices and costs, arising from the anticipated development and production of resources, net of the associated royalties, operating costs, development costs, and abandonment and reclamation costs;
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"gross" means:
"hydrocarbon" means a compound consisting of hydrogen and carbon, which, when naturally occurring, may also contain other elements such as sulphur;
"light crude oil" means crude oil with a relative density greater than 31.1 degrees API gravity;
"LNG" means liquefied natural gas;
"McDaniel" has the meaning ascribed thereto under the heading "Statement of Reserves Data and Other Oil and Gas Information - Disclosure of Reserves Data";
"McDaniel Report" has the meaning ascribed thereto under the heading "Statement of Reserves Data and Other Oil and Gas Information - Disclosure of Reserves Data";
"medium crude oil" means crude oil with a relative density greater than 22.3 degrees API gravity and less than or equal to 31.1 degrees API gravity;
"natural gas" means a naturally occurring mixture of hydrocarbon gases and other gases;
"natural gas liquids" or " NGLs" means those hydrocarbon components that can be recovered from natural gas as a liquid including, but not limited to, ethane, propane, butanes, pentanes plus, and condensates;
"net" means:
"NGTL" means the natural gas gathering and transportation system in Alberta and northeastern British Columbia, owned by Nova Gas Transmission Ltd., a subsidiary of TC Energy Corporation;
"NI 51‐101" means National Instrument 51‐101 ‐ Standards of Disclosure for Oil and Gas Activities;
"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;
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"property" includes: (a) fee ownership or a lease, concession, agreement, permit, licence or other interest representing the right to extract oil or gas subject to such terms as may be imposed by the conveyance of that interest; (b) royalty interests, production payments payable in oil or gas, and other non‐operating interests in properties operated by others; and (c) an agreement with a foreign government or authority under which a reporting issuer participates in the operation of properties or otherwise serves as "producer" of the underlying reserves (in contrast to being an independent purchaser, broker, dealer or importer). A property does not include supply agreements, or contracts that represent a right to purchase, rather than extract, oil or gas;
"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;
"reserves" are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: (a) analysis of drilling, geological, geophysical and engineering data; (b) the use of established technology; and (c) specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates;
"resource play" refers to drilling programs targeted at regionally distributed crude oil or natural gas accumulations; successful exploitation of these reservoirs is dependent upon technologies such as horizontal drilling and multi‐stage fracture stimulation to access large rock volumes in order to produce economic quantities of oil or natural gas;
"shale gas" means natural gas: (a) contained in dense organic‐rich rocks, including low‐permeability shales, siltstones and carbonates, in which the natural gas is primarily adsorbed on the kerogen or clay minerals; and (b) that usually requires the use of hydraulic fracturing to achieve economic production rates; and
"undeveloped reserves" are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, 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) to which they are assigned.
Words importing the singular number only include the plural, and vice versa, and words importing any gender include all genders. All dollar amounts set forth in this annual information form are in Canadian dollars, except where otherwise indicated.
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ABBREVIATIONS AND OIL AND GAS ADVISORIES
Crude Oil and Natural Gas Liquids
Natural Gas
bbl
barrel
Mcf
thousand cubic feet
bbls
barrels
MMcf
million cubic feet
Mbbls
thousand barrels
bcf/d
billion cubic feet per day
NGLs
natural gas liquids
Mcf/d
thousand cubic feet per day
BOE or boe
barrel of oil equivalent
MMcf/d
million cubic feet per day
Mboe
thousand barrels of oil
Mcfe
thousand cubic feet of natural gas equivalent
equivalent
MMboe
million barrels of oil equivalent
MMcfe/d
million cubic feet of natural gas equivalent per day
boe/d
barrels of oil equivalent per day
MMbtu
million British Thermal Units
bbls/d
barrels of oil or liquids per day
GJ/d
Gigajoules per day
Other
AECO
a notional market point on the NGTL system, located at the AECO 'C' hub in Southeastern Alberta,
where the purchase and sale of natural gas is transacted
APEGA
The Association of Professional Engineers and Geoscientists of Alberta
CCS
Carbon capture and storage
CCUS
Carbon capture, utilization and storage
Henry Hub
a central delivery location, located near Louisiana's Gulf Coast connecting several intrastate and
interstate pipelines, that serves as the official delivery location for futures contracts on the NYMEX
WTI
means West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the
crude oil standard grade
The term "boe" or barrels of oil equivalent and "Mcfe" or thousand cubic feet equivalent may be misleading, particularly if used in isolation. A boe or Mcfe 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.
This annual information form contains certain oil and gas metrics, which 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 herein to provide readers with additional measures to evaluate the Corporation's performance; however, such measures are not reliable indicators of the future performance of the Corporation and future performance may not compare to the performance in previous periods and therefore such metrics should not be unduly relied upon.
Certain other terms used herein but not defined herein are defined in NI 51101 and, unless the context otherwise requires, shall have the same meanings herein as in NI 51101.
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CONVERSION
The following table sets forth certain conversions between Standard Imperial Units and the International System of Units (or metric units).
To Convert From
To
Multiply By
Mcf
cubic metres
28.317
cubic metres
cubic feet
35.315
bbls
cubic metres
0.159
cubic metres
bbls
6.289
feet
metres
0.305
metres
feet
3.281
miles
kilometres
1.609
kilometres
miles
0.621
acres
hectares
0.405
hectares
acres
2.471
gigajoules
MMbtu
0.950
MMbtu
gigajoules
1.0526
FORWARD‐LOOKING STATEMENTS
Certain statements contained in this annual information form constitute forward looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward looking statements. Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These 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. Advantage believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements included in, or incorporated by reference into, this annual information form should not be unduly relied upon. These statements speak only as of the date of this annual information form.
In particular, this annual information form contains forward looking statements pertaining to, but not limited to, the following:
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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 can be profitably produced in the future. The forward‐looking statements contained in this annual information form are expressly qualified by this cautionary statement.
The actual results could differ materially from those anticipated in these forward looking statements as a result of the risk factors set forth below and elsewhere in this annual information form. Such risks include, but are not limited to: risks related to changes in general economic conditions (including as a result of demand and supply effects resulting from the actions of OPEC and non‐OPEC countries) which will, among other things, impact demand for and market prices of the Corporation's products, market and business conditions; continued volatility in market prices for crude oil, NGLs and natural gas; the impact of significant declines in market prices for crude oil, NGLs and natural gas; stock market volatility; changes to legislation and regulations, including environmental regulations, and how they are interpreted and enforced; the Corporation's ability to comply with current and future environmental or other laws; actions by governmental or regulatory authorities including increasing taxes, changes in investment or other regulations; changes
Disclaimer
Advantage Energy Ltd. published this content on March 04, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 04, 2025 at 22:52:13.703.