MENA Hydrocarbons Inc. ("MENA" or the "Company") (TSX VENTURE:MNH),
on behalf of its 100% owned US subsidiary, Raven Wing Resources
Inc., is pleased to release its September 1, 2011 National
Instrument 51-101 compliant reserves and resource appraisal for its
shallow light and medium oil project in NW Montana, and its Wasatch
Plateau Gas Project in East-Central Utah. The report was prepared
by the Colorado based independent qualified reserves evaluators
Gustavson Associates as of October 7, 2011.
Highlights
-- Net present value (discounted 10% before tax - forecast prices) of $38.1
million ($0.17 per MENA share) attributed to its NW Montana proven +
probable (2P) reserves.
-- Net present value (discounted 10% before tax - forecast prices) of $16.7
million ($0.07 per MENA share) attributed to its NW Montana proven (1P)
reserves.
-- Net present value (discounted 10% before tax - forecast prices) of
$148.4 million ($0.66 per MENA share) attributed to its NW Montana
proven + probable + possible (3P) reserves.
-- In addition to the net 1P reserves of 0.4 MMbbl, net 2P reserves of 1.1
MMbbl and net 3P reserves of 5.4 MMbbl assigned to MENA's Northwest
Montana lands, Gustavson also assigned those same lands net prospective
oil resources of 1.1 MMbbl (low estimate), 7.0 MMbbl (best estimate) and
14.6 MMbbl (high estimate).
-- In addition to MENA's Northwest Montana lands, Gustavson also evaluated
MENA's Wasatch Plateau gas project located in East Central Utah and
assigned those lands total net prospective gas resources of 50.7 Bcf
(low estimate), 107.1 Bcf (best estimate) and 274.8 Bcf (high estimate).
Gustavson characterizes this exploration project as low to moderate
risk.
-- With the assignment of these US based reserves, the total net present
value (discounted 10% after tax-forecast prices) of MENA's company wide
2P reserves (including MENA's Lagia, Egypt onshore heavy oil reserves as
at May 18, 2011) is $53.5 million (or $0.24 per MENA share), and the net
present value (discounted 10% after tax-forecast prices) of MENA's
company wide 3P reserves is $163.2 million (or $0.72 per MENA share).
As a result of increased drilling activity in the areas
surrounding MENA's US properties, and in connection with
management's ongoing effort to maximize shareholder value, MENA
engaged Gustavson to prepare an independent evaluation the
Company's reserves and resources, as at September 1, 2011, for the
Lewis and Clark Shallow Mississippian Oil Project located on the
south dome of the Sweetgrass Arch located in the Pondera and Teton
counties, Northwest Montana and the Southern Wasatch Plateau Gas
Project located in East-Central Utah.
Commenting on the Gustavson report, Graham Lyon, MENA's
President and Chief Executive Officer said "Even though the US is
not the primary focus of MENA, our team has been working diligently
over the last several months to ascertain the prospectivity and
value of our existing US land base. We are very pleased with these
results and will soon be evaluating the best way forward to unlock
shareholder value from our US holdings."
The information below is derived from Gustavson's report dated
October 7, 2011 and effective as of September 1, 2011. Gustavson's
report was prepared in accordance with the standards contained in
the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook")
and utilizes the reserves definitions contained in National
Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). A copy of Gustavson's report is available
at www.sedar.com under MENA's profile. All references to "$" in
this news release mean the United States dollar.
The properties
The Lewis and Clark project area
The Lewis and Clark project area is located on the south dome of
the Sweetgrass Arch in Pondera and Teton counties, Northwest
Montana. The Lewis and Clark project area is located in an active
petroleum-producing basin and is surrounded by numerous oil and gas
fields with an extensive gathering and transport infrastructure.
The prospect is centered on and adjacent to the existing Pondera
Field that produces oil from porous carbonates of the
Mississippian-age Sun River Dolomite - the same horizon targeted by
the project. The Pondera field has produced over 26.7 MMBbl. Raven
Wing Resources, a wholly-owned subsidiary of MENA, holds 6,242
gross acres (with an 81.2% average working interest) and has
recently renewed all of its leases.
The Southern Wasatch Plateau Gas project area
The Southern Wasatch Plateau Gas project area is located in
East-Central Utah. The primary target zones are Cretaceous
(Turonian) sands and coals of the Ferron Sandstone Member. The
Clear Creek Field is an established analog for the Ferron sandstone
production and has produced approximately 138 Bcf as of August
2011. The Drunkard's Wash coalbed methane field is an analog for
CBM targets and has produced 833 Bcf as of August 2011. Raven Wing
Resources, a wholly-owned subsidiary of MENA, holds approximately
36,201 gross acres (with a 99.5% average working interest)
prospective for both commercial gas sand and coal bed methane.
Reserves estimates for the Lewis and Clark project area
The following tables set forth certain information relating to
MENA's light and medium oil reserves attributed to the Lewis and
Clark prospect, and the net present values of future net revenue
associated with such reserves, as at September 1, 2011, before and
after income taxes and using forecast prices and costs. It should
not be assumed that the estimates of future net revenues presented
in the tables below represent the fair market value of the
reserves. There is no assurance that the forecast prices and costs
assumptions will be attained and variances could be material. The
recovery and reserve estimates of MENA's oil reserves provided
herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual oil reserves may be
greater than or less than the estimates provided herein.
Reserves data (forecast prices and costs)
Light and Before Income Taxes Discounted at (%/year)
Medium Oil ($000's)
---------------------------------------------
Reserves Category Net (Mbbl) 0 5 10 15 20
----------------------------------------------------------------------------
Proved Undeveloped 410 24,704 19,976 16,666 14,240 12,391
---------------------------------------------------------
Total Proved 410 24,704 19,976 16,666 14,240 12,391
Probable 676 35,086 27,033 21,393 17,289 14,211
---------------------------------------------------------
Total Proved Plus
Probable 1,086 59,789 47,009 38,059 31,529 26,602
Possible 4,346 227,899 156,166 110,344 80,011 59,311
---------------------------------------------------------
Total Proved +
Probable +
Possible 5,432 287,689 203,175 148,401 111,540 85,913
Light and After Income Taxes Discounted at (%/year)
Medium Oil ($000's)
---------------------------------------------
Reserves Category Net (Mbbl) 0 5 10 15 20
----------------------------------------------------------------------------
Proved Undeveloped 410 16,058 12,888 10,674 9,052 7,819
---------------------------------------------------------
Total Proved 410 16,058 12,888 10,674 9,052 7,819
Probable 676 22,806 17,360 13,568 10,825 8,780
---------------------------------------------------------
Total Proved Plus
Probable 1,086 38,863 30,249 24,241 19,877 16,599
Possible 4,346 148,134 100,298 69,990 50,095 36,633
---------------------------------------------------------
Total Proved +
Probable +
Possible 5,432 186,998 130,546 94,232 69,972 53,232
The following table sets forth a summation of (i) MENA's light
and medium oil reserves attributed to the Lewis and Clark prospect,
and the net present values of future net revenue associated with
such reserves, as at September 1, 2011, and (ii) MENA's crude oil
reserves contained in one main fault block covered by the Lagia
Development Lease and the net present values of future net revenue
associated with such reserves, as at May 18, 2011, as evaluated by
DeGolyer & MacNaughton Canada Limited ("D&M") in the report
of D&M dated May 19, 2011 evaluating the crude oil reserves of
MENA, in each case after income taxes and using forecast prices and
costs.
Total MENA Reserves After Income Taxes
Net Oil Discounted at (%/year) ($000's)
---------------------------------------------
Reserves Category (Mbbl) 0 5 10 15 20
----------------------------------------------------------------------------
Proved Undeveloped 1,559 26,445 18,569 13,099 9,202 6,366
------------------------------------------------------
Total Proved 1,559 26,445 18,569 13,099 9,202 6,366
Probable 3,574 77,622 55,056 40,408 30,471 23,459
------------------------------------------------------
Total Proved Plus
Probable 5,133 104,066 73,626 53,506 39,673 29,825
Possible 10,756 255,317 164,057 109,678 75,747 53,672
------------------------------------------------------
Total Proved +
Probable + Possible 15,889 359,384 237,682 163,185 115,420 83,497
For additional information relating to the reserves estimates
respecting our Lagia Development Lease, please see the material
change report of the Company dated and filed on June 9, 2011 on
www.sedar.com, and the joint management information circular and
proxy statement of the Company dated April 15, 2011 and filed on
www.sedar.com on April 27, 2011.
Notes to reserves tables:
1. Columns may not add due to rounding.
2. No heavy oil, natural gas or natural gas liquids reserves
have been attributed to Raven Wing's properties.
3. "Reserves" are the 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: analysis of
drilling, geological, geophysical and engineering data; the use of
established technology; and specified economic conditions, which
are generally accepted as being reasonable. Reserves are classified
according to the degree of certainty associated with the
estimates.
"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. At least a 90% probability that the quantities
actually recovered will equal or exceed the estimated proved
reserves is the targeted level of certainty.
"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.
At least a 50% probability that the quantities actually recovered
will equal or exceed the sum of the estimated proved plus probable
reserves is the targeted level of certainty.
"Possible reserves" are those additional reserves that are less
certain to be recovered than probable reserves. At least a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves is
the targeted level of certainty.
"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.
4. The extent and character of all factual data supplied to
Gustavson were accepted by Gustavson as represented. No field
inspections were conducted.
Pricing assumptions
The September 1, 2011 Gustavson price forecast is summarized in
the following table:
----------------------------------------------------------------------------
Year $/bbl
----------------------------------------------------------------------------
2012 82.88
2013 84.70
2014 85.05
2015 85.42
2016 85.84
2017 86.68
2018 87.50
2019 to 2027 88.43
Resource estimates for the Lewis and Clark and Southern Wasatch
Plateau project areas
This news release contains estimates of prospective resources
described above. Prospective resources are those quantities of
petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of
future development projects. Prospective resources have both an
associated chance of discovery and a chance of development.
Prospective resources are further subdivided in accordance with the
level of certainty associated with recoverable estimates assuming
their discovery and development and may be subclassified based on
project maturity. There is no certainty that these prospective
resources will be commercially viable to produce any portion of the
resources. These estimates of resources are generally quoted as a
range according to the level of confidence associated with the
estimates. See below for further details.
About MENA Hydrocarbons
MENA Hydrocarbons is an international oil and gas company
focused on growing an asset base of production, development and
high impact exploration in the Middle East and North Africa region.
In Egypt, MENA owns and operates the development lease for the
Lagia oil field, a 32 square kilometre onshore block located on the
Sinai Peninsula, directly adjacent to the Gulf of Suez. In Syria,
MENA owns a 30% participating interest in Block 9 in Syria, a
10,032 square kilometre onshore block prospective for crude oil,
natural gas and condensate. In the United States, MENA owns 6,242
gross acres (with an 81.2% average working interest) in
Northwestern Montana with light/medium oil reserves, and 36,201
gross acres (with a 99.5% average working interest) in East-Central
Utah prospective for both commercial gas sand and coal bed methane.
MENA's shares currently trade on the TSX Venture Exchange under the
symbol "MNH".
Further information
For more information, please see an updated version of MENA's
corporate presentation on www.menahydrocarbons.com.
Forward looking information
This news release contains forward-looking information relating
to reserves and resource estimates in respect of the Company's
properties, the values of such reserves estimates, MENA's plans for
its US properties and other statements that are not historical
facts. Such forward-looking information is subject to important
risks, uncertainties and assumptions. The results or events
predicated in this forward-looking information may differ
materially from actual results or events. As a result, you are
cautioned not to place undue reliance on this forward-looking
information.
Forward-looking information is based on certain factors and
assumptions regarding, among other things, development plans of the
Company in respect of its Egyptian and US properties, the impact of
increasing competition; the general stability of the economic and
political environments in which the Company operates or owns
interests; the timely receipt of any required regulatory approvals;
the ability of the Company to obtain qualified staff, equipment and
services in a timely and cost efficient manner; drilling results;
the ability of the operator of the projects which the Company has
an interest in to operate the field in a safe, efficient and
effective manner; the ability of the Company to obtain financing on
acceptable terms; field production rates and decline rates; the
ability to replace and expand oil and natural gas reserves through
acquisition, development of exploration; the timing and costs of
pipeline, storage and facility construction and expansion and the
ability of the Company to secure adequate product transportation;
future oil and natural gas prices; currency, exchange and interest
rates; the regulatory framework regarding royalties, taxes and
environmental matters in the jurisdictions in which the Company
operates; and the ability of the Company to successfully market its
oil and natural gas products, and other similar matters. While the
Company considers these assumptions to be reasonable based on
information currently available to it, they may prove to be
incorrect.
Forward looking-information is subject to certain factors,
including risks and uncertainties that could cause actual results
to differ materially from what is currently expected. These factors
include risks associated with instability of the economic and
political environments in which the Company operates or owns
interests, oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets,
volatility of commodity prices, currency fluctuations, imprecision
of reserve estimates, environmental risks, competition from other
producers, inability to retain drilling rigs and other services,
incorrect assessment of the value of acquisitions, the inability to
settle the definitive terms of the farmout arrangements, failure to
realize the anticipated benefits of acquisitions, delays resulting
from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external
sources, reliance on key personnel, regulatory risks and delays,
including risks relating to the acquisition of necessary licenses
and permits, environmental risks and insurance risks.
The estimates of reserves and resources in this news release
constitute forward-looking information which are subject to certain
risks and uncertainties, including those associated with the
Company's future development plans, the drilling and completion of
future wells, limited available geological data and uncertainties
regarding the actual production characteristics of, and recovery
efficiencies associated with, the reservoirs, all of which are
being assumed. As estimates, there is no guarantee that the
estimated reserves or resources will be recovered or produced.
Actual reserves and resources may be greater than or less than the
estimates provided in this news release.
For additional information relating to the reserves and resource
estimates respecting our Lagia property, please see the material
change report of the Company dated and filed on June 9, 2011 on
www.sedar.com, and the joint management information circular and
proxy statement of the Company dated April 15, 2011 and filed on
www.sedar.com on April 27, 2011. For additional information
relating to the reserves and resource estimates respecting our US
properties, please see the material change report of the Company
dated and filed October 11, 2011 on www.sedar.com.
You should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. While the Company may elect to, the Company is under no
obligation and does not undertake to update this information at any
particular time, except as required by law.
Resources; uncertainty categories
Estimates of resources always involve uncertainty, and the
degree of uncertainty can vary widely between
accumulations/projects and over the life of a project.
Consequently, estimates of resources are generally quoted as a
range according to the level of confidence associated with the
estimates. The range of uncertainty of estimated recoverable
volumes may be represented by either deterministic scenarios or by
a probability distribution. Resources are generally provided as
low, best, and high estimates as follows:
-- "Low Estimate" - This is considered to be a conservative estimate of the
quantity that will actually be recovered. It is likely that the actual
remaining quantities recovered will exceed the low estimate. If
probabilistic methods are used, there should be at least a 90 percent
probability (P90) that the quantities actually recovered will equal or
exceed the low estimate.
-- "Best Estimate" - This is considered to be the best estimate of the
quantity that will actually be recovered. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
best estimate. If probabilistic methods are used, there should be at
least a 50 percent probability (P50) that the quantities actually
recovered will equal or exceed the best estimate.
-- "High Estimate" - This is considered to be an optimistic estimate of the
quantity that will actually be recovered. It is unlikely that the actual
remaining quantities recovered will exceed the high estimate. If
probabilistic methods are used, there should be at least a 10 percent
probability (P10) that the quantities actually recovered will equal or
exceed the high estimate.
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 release.
Contacts: MENA Hydrocarbons Inc. Graham Lyon President &
Chief Executive Officer +1.403.930.7500 +1.403.930.7599 (FAX) MENA
Hydrocarbons Inc. Jason Bednar Vice President, Finance & Chief
Financial Officer +1.403.930.7500 +1.403.930.7599 (FAX) MENA
Hydrocarbons Inc. 1000, 205 - 5th Avenue S.W. Calgary, AB T2P
2V7general_inquiries@menahydrocarbons.comwww.menahydrocarbons.com