Golconda Announces Reserves Results and Resumption in Trading
October 24 2012 - 5:39PM
Marketwired Canada
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES
Golconda Resources Ltd. (the "Corporation" or "Golconda") (TSX VENTURE:GA) is
pleased to provide the following information regarding the independent reserves
assessment and evaluation of Golconda's proposed 25% working interest in
approximately 1,600 acres of Cold Lake First Nation lands (the "Lands"), which
are the subject of the previously announced joint venture among the Corporation,
a Calgary based private oil and gas company ("PrivateCo") and Tri-Rez Ebay
Energy Ltd. ("TRE") with respect to oil and gas exploration and development (the
"Joint Venture"). The evaluation was conducted by GLJ Petroleum Consultants Ltd.
("GLJ"), effective as at August 31, 2012 and was conducted pursuant to National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI
51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE") reserves
definitions.
Pursuant to the Joint Venture agreement, TRE has agreed with Golconda and
PrivateCo (collectively, the "Farmees") to acquire from Indian Oil and Gas
Canada ("IOGC") a lease (the "Lease") covering the Lands. The Farmees have
agreed to a ten (10) well work program over a period of three (3) years, which
shall consist of the Farmees drilling a minimum of three (3) wells prior to the
end of the first year of the Lease, a minimum of four (4) wells prior to the end
of the second year of the Lease and a minimum of three (3) additional wells
prior to the end of the third year of the Lease. The Farmees will each earn a
25% working interest in each successfully drilled or abandoned well.
RESERVES INFORMATION
The following table summarizes Golconda's proposed working interest in the oil
reserves on the Lands effective as of August 31, 2012 as evaluated by GLJ.
Light and Natural Gas Total Oil
Medium Oil Heavy Oil Liquids Equivalent(3)
----------------------------------------------------------------
RESERVES Gross(1) Net(2) Gross(1) Net(2) Gross(1) Net(2)Gross(1) Net(2)
CATEGORY (MMcf) (MMcf) (Mbbls) (Mbbls) (Mbbls) (Mbbls) (Mboe) (Mboe)
----------------------------------------------------------------------------
PROVED
Producing 0 0 0 0 0 0 0 0
Developed
Non-
producing 0 0 0 0 0 0 0 0
Undeveloped 0 0 112 87 0 0 112 87
----------------------------------------------------------------
TOTAL PROVED 0 0 112 87 0 0 112 87
TOTAL
PROBABLE 0 0 197 149 0 0 197 149
----------------------------------------------------------------
TOTAL PROVED
PLUS
PROBABLE 0 0 309 236 0 0 309 236
----------------------------------------------------------------------------
Notes:
(1) "Gross" Company reserves are the Company's total working interest share
before the deduction of any royalties and without including any royalty
interests of the Company.
(2) "Net" reserves are the Company's working interest share after deduction
of royalties but including royalty interests of the Company.
(3) In the case of BOEs, using BOEs derived by converting gas to oil
equivalent in the ratio of six thousand cubic feet of gas to one barrel
of oil (6 MCF:1 bbl). See "Reader Advisory - BOE Presentation" and
"Reader Advisory - Information Regarding Disclosure on Oil and Gas
Reserves" below.
The following table summarizes the Net Present Value of Golconda's share of oil
as reserves effective as at August 31, 2012.
UNIT VALUE
NET PRESENT VALUES OF FUTURE NET BEFORE INCOME
REVENUE BEFORE INCOME TAXES TAXES DISCOUNTED
DISCOUNTED AT (%/year) AT 10%/YEAR
----------------------------------------------------
0% 5% 10% 15% 20%
RESERVES CATEGORY (M$) (M$) (M$) (M$) (M$) ($/BOE)($/Mcfe)
----------------------------------------------------------------------------
PROVED:
Developed Producing 0 0 0 0 0 0.00 0.00
Developed Non-Producing 0 0 0 0 0 0.00 0.00
Undeveloped 2,301 1,860 1,538 1,297 1,111 17.66 2.94
----------------------------------------------------
TOTAL PROVED(1)(2) 2,301 1,860 1,538 1,297 1,111 17.66 2.94
TOTAL PROBABLE(1)(2) 4,308 3,373 2,746 2,306 1,984 18.43 3.07
----------------------------------------------------
TOTAL PROVED PLUS
PROBABLE(1)(2) 6,609 5,233 4,284 3,603 3,095 18.14 3.02
----------------------------------------------------
Notes:
(1) Forecast pricing used is based on GLJ published price forecasts
effective July 1, 2012.
(2) It should not be assumed that the net present values of future net
revenues estimated by GLJ represent fair market value of the reserves.
There is no assurance that the forecast price and cost assumptions will
be attained and variances could be material. See "Reader Advisory -
Information Regarding Disclosure on Oil and Gas Reserves" below.
Trading in the shares of Golconda on the TSX Venture Exchange will resume at the
opening of market on Friday October 26, 2012.
Forward Looking Statements
Certain statements contained in this press release may constitute
forward-looking statements. These statements relate to future events or the
Golconda's 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. Golconda believes that 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 this press release should not be unduly relied upon by investors.
These statements speak only as of the date of this press release and are
expressly qualified, in their entirety, by this cautionary statement.
In particular, this press release contains forward-looking statements,
pertaining to the following: projections of market prices and costs, supply and
demand for oil and natural gas, the quantity of reserves, oil and natural gas
production levels, capital expenditure programs, treatment under governmental
regulatory and taxation regimes, expectations regarding Golconda's ability to
raise capital and to continually add to reserves through acquisitions and
development, and projections of market prices and costs.
With respect to forward-looking statements contained in this press release,
Golconda has made assumptions regarding, among other things: the legislative and
regulatory environments of the jurisdiction where Golconda carries on business
or has operations, the impact of increasing competition, and Golconda's ability
to obtain additional financing on satisfactory terms.
Golconda's actual results could differ materially from those anticipated in
these forward-looking statements as a result of risk factors that may include,
but are not limited to: volatility in the market prices for oil and natural gas;
uncertainties associated with estimating reserves; uncertainties associated with
Golconda's ability to obtain additional financing on satisfactory terms;
geological, technical, drilling and processing problems; liabilities and risks,
including environmental liabilities and risks, inherent in oil and natural gas
operations; incorrect assessments of the value of acquisitions; competition for,
among other things, capital, acquisitions of reserves, undeveloped lands and
skilled personnel.
This forward-looking information represents Golconda's views as of the date of
this document and such information should not be relied upon as representing its
views as of any date subsequent to the date of this document. Golconda has
attempted to identify important factors that could cause actual results,
performance or achievements to vary from those current expectations or estimates
expressed or implied by the forward-looking information. However, there may be
other factors that cause results, performance or achievements not to be as
expected or estimated and that could cause actual results, performance or
achievements to differ materially from current expectations. There can be no
assurance that forward-looking information will prove to be accurate, as results
and future events could differ materially from those expected or estimated in
such statements. Accordingly, readers should not place undue reliance on
forward-looking information. Except as required by law, Golconda undertakes no
obligation to publicly update or revise any forward-looking statements.
Information Regarding Disclosure on Oil and Gas Reserves. The reserves data set
forth above is based upon an independent reserves assessment and evaluation
prepared by GLJ with an effective date of August 31, 2012 (the "GLJ Report").
The presentation summarizes Golconda's crude oil, natural gas liquids and
natural gas reserves and the net present values before income tax of future net
revenue for Golconda's reserves using forecast prices and costs based on the GLJ
Report. The GLJ Report has been prepared in accordance with the standards
contained in the COGE and the reserve definitions contained in NI 51-101. All
evaluations and reviews of future net cash flows are stated prior to any
provisions for interest costs or general and administrative costs and after the
deduction of estimated future capital expenditures for wells to which reserves
have been assigned. It should not be assumed that the estimates of future net
revenues presented in the tables above represent the fair market value of the
reserves. There is no assurance that the forecast prices and cost assumptions
will be attained and variances could be material. The recovery and reserve
estimates of our crude oil, natural gas liquids and natural gas reserves
provided herein are estimates only and there is no guarantee that the estimated
reserves will be recovered. Actual crude oil, natural gas and natural gas
liquids reserves may be greater than or less than the estimates provided herein.
The reserve data provided in this release only represents a summary of the
disclosure required under NI 51-101.
BOE Presentation. References herein to "boe" mean barrels of oil equivalent
derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf)
of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used
in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy
conversion method primarily applicable at the burner tip and does not represent
a value equivalency at the wellhead.
FOR FURTHER INFORMATION PLEASE CONTACT:
Golconda Resources Ltd.
David Orr
(403) 539-4440
dorr@golconda.ca
www.golcondaresources.com
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