Carmen Energy Inc. Announces Reserve Additions
December 02 2011 - 5:10PM
PR Newswire (Canada)
CALGARY, Dec. 2, 2011 /CNW/ - Carmen Energy Inc. ("Carmen" or the
"Corporation") is pleased to report an independent reserves
evaluation by InSite Petroleum Consultants Ltd. ("InSite") entitled
"Evaluation of the Oil and Gas Reserves in the Sylvan Lake and
Viking-Kinsella Areas" (the "InSite Sylvan Lake/Viking-Kinsella
Report"). The InSite Sylvan Lake/Viking-Kinsella Report is an
estimate of the oil, natural gas and natural gas liquids reserves
associated with the 102/14-7-38-3w5 well on the Sylvan Lake
properties and the Hz16-17-49-12w4 well on the Viking-Kinsella
properties in which Carmen has a right to earn a working interest
pursuant to previously disclosed farmin agreements. The InSite
Sylvan Lake/Viking-Kinsella Report has an effective date of
December 1, 2011 and was prepared in accordance with National
Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities and the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook"). The following is a summary of data contained in the
InSite Sylvan Lake/Viking-Kinsella Report of estimated reserves as
evaluated in the InSite Sylvan Lake/Viking-Kinsella Report with
regards to now on first month production. All evaluations of future
net revenue are after the deduction of future, royalties,
development costs, production costs and well abandonment costs but
before consideration of indirect costs such as administrative,
overhead and other miscellaneous expenses. The estimated future net
revenue contained in the following tables do not represent the fair
market value of the reserves in which Carmen has a right to earn an
interest. There is no assurance that the forecast price and cost
assumptions contained in the InSite Sylvan Lake/Viking-Kinsella
Report will be attained and variations could be material. Reserves
Data (Forecast Prices and Costs) SUMMARY OF OIL AND NATURAL GAS
RESERVES AND NETPRESENTVALUESOF FUTURENETREVENUEASOF DECEMBER 1,
2011 FORECAST PRICES AND COSTS (SEPTEMBER 30, 2011) RESERVES LIGHT
AND NATURALGAS MEDIUMOIL HEAVYOIL NATURAL GAS LIQUIDS SULPHUR Gross
Net Gross Net Gross Net Gross Net Gross Net RESERVES CATEGORY
(Mbbls) (Mbbls) (Mbbls) (Mbbls) (MMcf) (MMcf) (Mbbls) (Mbbls) (LT)
(LT) PROVED: Developed 4.9 4.5 - - 126.7 115.9 4.9 3.8 114.1 97.9
Producing Developed - - - - - - - - - - Non-Producing Undeveloped -
- - - - - - - - - TOTAL PROVED 4.9 4.5 - - 126.7 115.9 4.9 3.8
114.1 97.9 PROBABLE 63.8 54.4 - - 168.6 155.0 3.4 2.5 45.6 38.1
TOTAL PROVED PLUS PROBABLE 68.7 58.9 - - 295.3 270.9 8.4 6.4 159.7
136.0 Notes: (1) "Gross" means: (i) in relation to Carmen's
interest in production and reserves, its "company gross reserves",
which are Carmen's interest (operating and non operating) share
before deduction of royalties and without including any royalty
interest of Carmen; (ii) in relation to wells, the total number of
wells in which Carmen has an interest; and (iii) in relation to
properties, the total area of properties in which Carmen has an
interest. (2) "Net" means: (a) in relation to Carmen's interest in
production and reserves, Carmen's working interest (operating and
non operating) share after deduction of royalty obligations, plus
Carmen's royalty interests in production or reserves; (b) in
relation to wells, the number of wells obtained by aggregating
Carmen's working interest in each of its gross wells; and (c) in
relation to Carmen's interest in a property, the total area in
which Carmen has an interest multiplied by the working interest
owned by Carmen. The estimated net present value of future net
revenue before income taxes associated with the Sylvan Lake and
Viking-Kinsella reserves effective December 1, 2011 and based on
published InSite future price forecast as of September 30, 2011 are
summarized in the following table: UNIT VALUE BEFORE INCOME TAXES
NETPRESENTVALUESOF FUTURE NETREVENUE DISCOUNTEDAT BEFORE
INCOMETAXESDISCOUNTEDAT (%/year) 10%(1) 0% 5% 10% 15% 20% RESERVES
CATEGORY ($000s) ($000s) ($000s) ($000s) ($000s) ($/BOE) PROVED:
Developed 416.7 351.6 301.2 261.6 230.2 10.91 Producing Developed -
- - - - - Non-Producing Undeveloped - - - - - - TOTAL PROVED 416.7
351.6 301.2 261.6 230.2 10.91 PROBABLE 4,361.5 3,254.8 2,586.3
2,147.2 1,838.5 31.23 TOTAL PROVED PLUS 4,778.2 3,606.5 2,887.4
2,408.8 2,068.7 26.15 PROBABLE Note:
(1) Unit values are based on net
reserve volumes. Pricing Assumptions The forecast cost and price
assumptions in this section assume increases in wellhead selling
prices and take into account inflation with respect to future
operating and capital costs. Crude oil and natural gas benchmark
reference pricing, inflation and exchange rates utilized in the
InSite Sylvan Lake/Viking-Kinsella Report were as follows: SUMMARY
OF PRICING ASSUMPTIONS AS OFSEPTEMBER30, 2011FORECAST
PRICESANDCOSTS(1)(2) OIL NATURALGAS NATURAL GASLIQUIDS SULPHUR WTI
Edmonton Cushing Par Price AECO Edmonton Edmonton Edmonton EXCHANGE
Oklahoma 40° API Gas Price Condensate Butane Propane Ethane RATE(3)
Year ($US/Bbl) ($Cdn/Bbl) ($Cdn/MMBtu) ($Cdn/Bbl) ($Cdn/Bbl)
($Cdn/Bbl) ($Cdn/Bbl) ($/LT) ($US/$Cdn) 2011 85.00 84.73 3.83 88.97
67.79 50.84 11.50 65.00 0.980 2012 95.00 92.50 4.30 95.28 74.00
55.50 13.01 66.30 1.000 2013 100.00 97.50 5.00 100.43 78.00 58.50
15.27 67.63 1.000 2014 101.00 98.45 5.60 101.40 78.76 59.07 17.20
68.98 1.000 2015 102.00 99.40 6.00 102.38 79.52 59.64 18.49 70.36
1.000 2016 104.00 101.35 6.35 104.39 81.08 60.81 19.61 71.77 1.000
2017 106.00 103.29 6.59 106.39 82.64 61.98 20.37 73.20 1.000 2018
108.12 105.36 7.07 108.52 84.29 63.22 21.94 74.66 1.000 2019 110.28
107.47 7.22 110.69 85.97 64.48 22.38 76.16 1.000 2020 112.49 109.62
7.36 112.90 87.69 65.77 22.83 77.68 1.000 2021 114.74 111.81 7.51
115.16 89.45 67.09 23.30 79.23 1.000 2022 117.03 114.04 7.66 117.47
91.24 68.43 23.77 80.82 1.000 2023 119.37 116.33 7.81 119.82 93.06
69.80 24.25 82.44 1.000 2024 121.76 118.65 7.97 122.21 94.92 71.19
24.74 84.08 1.000 2025 124.20 121.03 8.13 124.66 96.82 72.62 25.24
85.77 1.000 2026 126.68 123.45 8.29 127.15 98.76 74.07 25.75 87.48
1.000 There- after +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr
+2.0%/yr +2.0%/yr +2.0%/yr 1.000 Notes:
(1) As at September 30, 2011.
(2) Inflation rate for costs escalated
2% per year from 2011. (3) Exchange
rate used to generate the benchmark reference prices in this table.
About Carmen Energy Inc. Carmen is based in Calgary, Alberta and a
publicly traded oil and gas exploration and production company. The
focus is on exploration and development of Western Canadian
Sedimentary Basin based oil and gas properties. The current
projects are the Jumpbush properties in south eastern Alberta, the
Ferrybank properties in central Alberta, the Sylvan Lake area
properties in Southern Alberta, the Viking-Kinsella properties in
Alberta and the Hamburg properties in northern western Alberta. ON
BEHALF OF THE BOARD OF DIRECTORS Mr. Brian Doherty, President, CEO
and Director Contact: brian.doherty@carmenenergy.ca; (403) 537-5590
Advisory Regarding Forward-Looking Information and Statements This
press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "will", "expects",
"believe", "plans", "potential" and similar expressions are
intended to identify forward-looking statements or information.
More particularly and without limitation, this press release
contains statements relating to "reserves" which are deemed to be
forward-looking statements as they involve the implied assessment,
based on certain estimates and assumptions, which the reserves
described, can be profitably produced in the future. Readers should
be cautioned that the forgoing list of forward-looking statements
and information contained herein should not be considered
exhaustive. The forward-looking statements and information in this
press release are based on certain key expectations and assumptions
made by Carmen. Although Carmen believes that the expectations and
assumptions on which such forward looking statements and
information are based are reasonable, undue reliance should not be
placed on the forward-looking statements and information because
Carmen can give no assurance that they will prove to be correct.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. These include, but are not limited to, the risks associated
with the oil and gas industry in general such as operational risks
in development, exploration and production; delays or changes in
plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve and resource
estimates; the uncertainty of estimates and projections relating to
reserves, resources, production, costs and expenses; health, safety
and environmental risks; commodity price and exchange rate
fluctuations; marketing and transportation; loss of markets;
environmental risks; competition; incorrect assessment of the value
of acquisitions; failure to realize the anticipated benefits of
acquisitions including the Acquisitions; ability to access
sufficient capital from internal and external sources; changes in
legislation, including but not limited to tax laws, royalties and
environmental regulations. Management has included the above
summary of assumptions and risks related to forward-looking
information provided in this press release in order to provide
securityholders with a more complete perspective on Carmen's future
operations and such information may not be appropriate for other
purposes. The forward-looking statements and information contained
in this press release are made as of the date hereof and Carmen
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws. 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. 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 press release. Carmen Energy Inc CONTACT:
Mr. Brian Doherty, President, CEO and DirectorContact:
brian.doherty@carmenenergy.ca; (403) 537-5590
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