Excelsior Updates Hangingstone Reserve and Resource Estimates
March 27 2008 - 1:22PM
Marketwired Canada
Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") is
pleased to announce the completion of an updated independent evaluation of
bitumen reserves and resources on Excelsior's Hangingstone property, near Fort
McMurray, Alberta. The effective date of the evaluation is December 31, 2007
("the effective date"). The report was prepared in respect of Excelsior's year
end reporting obligations under NI 51-101. The effective date of the evaluation
provided for the inclusion of two wells from this winters' core drilling
program. An additional 24 wells were drilled, cored and logged after the
effective date of the report. A complete resource analysis of the Hangingstone
asset including all 26 core wells is expected to be available in the second
quarter, 2008.
The reserve and resource estimates were prepared by DeGolyer and MacNaughton in
a report ("the DeGolyer report") with an effective date of December 31, 2007.
The DeGolyer report was prepared using assumptions and methodology guidelines
outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and
in accordance with National Instrument 51-101.
Bitumen Reserves
Well control and the presence of a prior cyclic steam stimulation project on the
lands provided for an assignment of 43.9 million barrels of probable reserves to
Excelsior's working interest share on 2.5 sections of Hangingstone lands.
Probable and possible bitumen reserves were estimated at 53.7 million barrels to
Excelsior's working interest share as of the effective date.
The DeGolyer report estimated that Excelsior's probable reserves would generate
$ 1,875 million of future net revenue with a net present value of $ 123.7
million discounted at 10%, after deduction of $ 415.7 million in future capital
requirements and abandonment costs of $ 0.5 million.
Probable plus possible bitumen reserves were forecast to generate $ 2,373.5
million of future net revenue with a 10 percent present value of $ 147.9
million, after deduction of future capital requirements of $ 526.6 million.
Contingent Resources
The DeGolyer report was also able to assign additional contingent resources to
Hangingstone lands. Best estimate contingent resources were estimated at 253.3
million barrels (Excelsior's working interest share); low estimate contingent
resources were estimated at 94.7 million barrels (Excelsior's working interest
share) and high estimate contingent resources were estimated at 571.6 million
barrels (Excelsior's working interest share). Contingent resources are further
categorized as marginal (Marginal Contingent Resources - Those quantities
associated with technically feasible projects that are either currently economic
or projected to be economic under reasonably forecasted improvements in
commercial conditions but are not committed for development because of one or
more contingencies).
The resource volumes have not been classified as reserves at this time pending
delineation drilling, development planning and regulatory applications. Resource
values should be considered as indicative in nature only.
Estimations of reserves and future net revenue discussed in this press release
constitute forward looking statements. See "Forward Looking Statements" below.
All references to future net revenue in this press release are estimated before
tax.
Robert Bailey, COO and Vice President of Excelsior commented; "DeGolyer and
MacNaughton integrated Excelsior's seismic data and 2007 drilling results in the
current analysis. The enhanced data set provided for significant increases in
probable reserves and best estimate contingent resources on the Hangingstone
asset. The balance of the winter drilling program, including 24 additional core
wells, is expected to allow for additional resource bookings."
Summary Tables
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Excelsior Energy Limited
Hangingstone 75% Working Interest
Bitumen Reserves (MMbbl)
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30/04/2007 31/12/2007
Probable (2P) (1) 19.2 43.9
Probable plus Possible (2) 40.2 53.7
----------------------------------------------------------------------------
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Excelsior Energy Limited
Hangingstone 75% Working Interest
Bitumen Reserves (MMbbl)
----------------------------------------------------------------------------
31/05/2007 31/12/2007
Low Estimate Contingent (3) (4) (5) 82.9 94.7
Best Estimate Contingent (6) 130.2 253.3
High Estimate Contingent (7) 193.1 576.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Excelsior Energy Limited
10 % Value of Future Net Revenue (8)
Forecast Prices and Costs
Bitumen Reserves and Resources (MM $)
----------------------------------------------------------------------------
30/04/2007 31/12/2007
Probable (2P) 57.8 123.7
Probable plus Possible 99.3 147.9
Low Estimate Contingent - -
Best Estimate Contingent - -
High Estimate Contingent - -
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Notes:
1) Probable reserves are those additional reserves that are less certain to
be recovered than proven reserves. It is equally likely that the actual
remaining quantities recovered will be greater or less than the sum of
the proven plus probable reserves.
2) Possible reserves are those additional reserves that are less certain to
be recovered than probable reserves. There is only a 10 % probability
that the quantities actually recovered will equal or exceed the sum of
the proven plus probable plus possible reserves.
3) Contingent resources are those quantities of oil and gas, estimated on a
given date, to be potentially recoverable from known accumulations but
are not currently economic. The DeGolyer report has categorized these
resources as contingent as additional delineation drilling, development
planning, project design and further regulatory applications are
required.
4) Contingent resources are further categorized as sub-marginal.
Sub-marginal contingent resources are those quantities associated with
technically feasible projects that are either economic or are expected
to be economic under reasonable forecasted improvements in commercial
conditions but are not committed for development because of one or more
contingencies.
5) Low Estimate is considered to be a conservative estimate of the quantity
that will actually be recovered from the accumulation. If probabilistic
methods are used, this term reflects P90 confidence level.
6) Best Estimate is considered to be the best estimate of the quantity that
will actually be recovered from the accumulation. If probabilistic
methods are used this term is a measure of central tendency of the
uncertainty distribution (P50).
7) High Estimate is considered to be an optimistic estimate of the quantity
that will actually be recovered from the accumulation. If probabilistic
methods are used the term reflects a P10 confidence level.
8) All references to future net revenue in this table are estimated before
tax.
About Excelsior Energy:
Excelsior is active in oil sands exploration and appraisal in the Hangingstone
and West Surmont areas near Fort McMurray, Alberta. Excelsior holds a 75%
working interest in 39 contiguous sections at Hangingstone and will own a 75 %
working interest in an additional 19 contiguous sections at West Surmont upon
completion of its farm-in obligations. The Company also holds a 100% working
interest in Blocks 16/1a and 16/6c in the UK North Sea and minor interests in
gas production in Alberta.
The Company strategy is to capture oil and gas appraisal and development
opportunities where we can leverage Management's diverse international
experience and field development expertise. This includes heavy oil reservoir
engineering and development of complex fields. The scale of the oil sands
resource opportunity in Alberta complements Excelsior's international portfolio
and strategy.
Forward-Looking Statements: This news release contains statements about future
events that are forward looking in nature and, as a result, are subject to
certain risks and uncertainties such as changes in plans or the occurrence of
unexpected events. Actual results may differ from the estimates provided by
management. Readers are cautioned not to place undue reliance on these
statements.
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