Oil and Gas Properties

12 Months Ended

Dec. 31, 2022

Disclosure of detailed information about property, plant and equipment [abstract]

OIL AND GAS PROPERTIES


	Cost		Accumulated depletion		Net book value
Balance, December 31, 2020	$	11,423,676	$	(8,346,128)	$	3,077,548
Capital expenditures	310,005		—		310,005

Property acquisitions	274		—		274
Transfers from exploration and evaluation assets (note 5)	7,727		—		7,727
Change in asset retirement obligations (note 9)	(12,222)		—		(12,222)
Divestitures	(37,835)		32,844		(4,991)
Property swaps	(26,131)		25,900		(231)
Impairment reversal	—		1,542,414		1,542,414
Foreign currency translation	(31,977)		34,765		2,788
Depletion	—		(458,941)		(458,941)
Balance, December 31, 2021	$	11,633,517	$	(7,169,146)	$	4,464,371
Capital expenditures	515,183		—		515,183

Property acquisitions	1,173		—		1,173
Transfers from exploration and evaluation assets (note 5)	8,496		—		8,496
Change in asset retirement obligations (note 9)	(147,020)		—		(147,020)
Divestitures	(265,166)		241,892		(23,274)

Impairment reversal	—		245,241		245,241
Foreign currency translation	296,033		(158,404)		137,629
Depletion	—		(581,033)		(581,033)
Balance, December 31, 2022	$	12,042,216	$	(7,421,450)	$	4,620,766

2022 Impairment Reversal

At December 31, 2022, the Company identified indicators of impairment reversal for oil and gas properties in five CGUs due to the increase in forecasted commodity prices in addition to changes in proved plus probable reserves. The recoverable amounts for three CGUs exceeded their carrying values which resulted in an impairment reversal of $245.2 million recorded at December 31, 2022. The recoverable amount for each CGU was based on its FVLCD which was estimated using a discounted cash flow model of proved plus probable cash flows from an independent reserve report prepared as at December 31, 2022. The after-tax discount rates applied to the cash flows were between 12% and 23%.

At December 31, 2022, the recoverable amounts of the five CGUs were calculated using the following benchmark reference prices for the years 2023 to 2032 adjusted for commodity differentials specific to the CGU. The prices and costs subsequent to 2032 have been adjusted for inflation at an annual rate of 2.0%.


	2023	2024	2025	2026	2027	2028	2029	2030	2031	2032
WTI crude oil (US$/bbl)	80.33	78.50	76.95	77.61	79.16	80.74	82.36	84.00	85.69	87.40
WCS heavy oil ($/bbl)	76.54	77.75	77.55	80.07	81.89	84.02	85.73	87.44	89.20	91.11
LLS crude oil (US$/bbl)	82.83	80.68	78.81	79.49	81.07	82.68	84.33	86.00	87.71	89.46
Edmonton par oil ($/bbl)	103.76	97.74	95.27	95.58	97.07	99.01	100.99	103.01	105.07	106.69
Henry Hub gas (US$/mmbtu)	4.74	4.50	4.31	4.40	4.49	4.58	4.67	4.76	4.86	4.95
AECO gas ($/mmbtu)	4.23	4.40	4.21	4.27	4.34	4.43	4.51	4.60	4.69	4.79
Exchange rate (CAD/USD)	1.34	1.31	1.30	1.30	1.29	1.29	1.29	1.29	1.29	1.29

The following table summarizes the recoverable amount and impairment reversal for each of the five CGUs at December 31, 2022 and demonstrates the sensitivity of the impairment reversal to reasonably possible changes in key assumptions inherent in the calculation.


	Recoverable amount		Impairment reversal		Change in discount rate of 1%		Change in oil price of $2.50/bbl		Change in gas price of $0.25/mcf
Conventional CGU (1)	$	119,031	$	23,707	$	—	$	—	$	—
Peace River CGU (1)	676,939		140,534		—		—		—
Lloydminster CGU	449,250		—		11,500		53,000		—

Viking CGU	1,322,193		81,000		39,500		78,000		4,000
Eagle Ford CGU	2,102,646		—		95,800		131,100		28,500
	$	4,670,059	$	245,241	$	146,800	$	262,100	$	32,500

(1)The impairment reversals for the Conventional and Peace River CGUs were limited to the total accumulated impairments less subsequent depletion of $23.7 million and $140.5 million, respectively. As a result, changes in the key assumptions presented in the table above have no impact on the amount of the impairment reversal as at December 31, 2022.

2021 Impairment Reversals

At June 30, 2021, indicators of impairment reversal were identified for oil and gas properties in each of the Company's six CGUs due to the increase in forecasted commodity prices. The recoverable amount for each of the six CGUs exceeded their carrying amounts which resulted in an impairment reversal of $1.1 billion recorded at June 30, 2021. The recoverable amount for each CGU was based on its FVLCD which was estimated using a discounted cash flow model of proved plus probable cash flows from an independent reserve report prepared as at December 31, 2020 and was adjusted by management for operations between December 31, 2020 and June 30, 2021. The after-tax discount rates applied to the cash flows were between 10% and 16%.

At December 31, 2021, indicators of impairment reversal were identified for oil and gas properties in five CGUs due to the increase in forecasted commodity prices in addition to changes in proved plus probable reserves. The recoverable amount for three CGUs exceeded their carrying amounts which resulted in an impairment reversal of $416 million recorded at December 31, 2021. The recoverable amount for each CGU was based on its FVLCD which was estimated using a discounted cash flow model of proved plus probable cash flows from an independent reserve report prepared as at December 31, 2021. The after-tax discount rates applied to the cash flows were between 12% and 19%.