Resource Update
June 25 2008 - 2:00AM
UK Regulatory
RNS Number : 4360X
Petrolatina Energy PLC
25 June 2008
25 June 2008
PetroLatina Energy Plc
("PetroLatina" or the "Company")
Resource Update
Proved, Probable and Possible Reserves Valued at US$165 million
PetroLatina, the oil and gas exploration and production company focused on Colombia, with interests in Guatemala, announces that Ryder
Scott Company, L.P. ("Ryder Scott"), the independent petroleum consultants, has recently completed an updated assessment of the reserves,
future production and income attributable to the Company's four concessions in Colombia as at 31 December 2007.
Ryder Scott reported that as at 31 December 2007, Proved Reserves net to the Company in respect of its interests in Colombia totalled
approximately 2.75 million barrels of oil equivalent ("boe") (corresponding figure as at 31 December 2006: approximately 0.45 million boe),
Proved plus Probable ("2P") reserves net to the Company totalled approximately 5.06 million boe (as at 31 December 2006: 0.66 million boe)
and Proved plus Probable plus Possible ("3P") reserves net to the Company totalled approximately 7.34 million boe (as at 31 December 2006:
approximately 2.5 million boe).
Based upon NYMEX crude oil futures prices as of 10 April 2008, the Net Present Value at a 10 per cent. discount ("NPV10") of the Proved
Reserves was $47.7 million. The NPV10 of the 2P reserves totalled $108.8 million and the NPV10 of the 3P reserves totalled $164.9 million.
The above mentioned NPV10 valuations do not take account of the exploration potential in respect of the Company's interests in Colombia
and Guatemala which the Directors of PetroLatina believe could be substantial. The Company's residual 20 per cent. well interests in
Guatemala, following the disposal of its Guatemala assets on 31 July 2007, may be evaluated separately once more drilling and production
data becomes available from the operator. In addition, Ryder Scott's assessment does not include the Company's pipeline asset, which was
valued at up to $30 million on a PV12 basis by Gaffney Cline & Associates in 2006.
A copy of the executive summary of Ryder Scott's report can be viewed on PetroLatina's website at www.petrolatinaenergy.com. As in all
aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering data and all conclusions represent
only informed professional judgments.
Greg Smith, Executive Chairman of PetroLatina, said:
"We believe that Ryder Scott's report supports our view that PetroLatina has significant potential to create value for its shareholders.
Our plan is to convert our Probable and Possible Reserves into Proved Producing Reserves and considerably increase production and cash flow
through the drill programme."
Proved and probable oil and gas reserves are estimated quantities of commercially producible hydrocarbons which the existing geological,
geophysical and engineering data show to be recoverable in future years from known reservoirs. The Proved Reserves reported by Ryder Scott,
conform to the definition approved by both the Society of Petroleum Engineers ("SPE") and the World Petroleum Congress ("WPC"). The Probable
Reserves and Possible Reserves reported by Ryder Scott conform to the definitions of Probable and Possible Reserves approved by the SPE and
WPC using the deterministic methodology.
The technical information contained within this announcement has been reviewed and approved by Mr Mark Patterson, a Non-executive
Director of the Company, as required under the AIM rules. Mr Patterson is a Petroleum Geologist and Geophysicist and has been a Member of
the American Association of Petroleum Geologists and the Society of Exploration Geophysicists for more than 25 years.
Enquiries:
PetroLatina Energy Plc Tel: +44 (0)20 7808 4851
Greg Smith, Executive Chairman /
Pawan Sharma, Executive Vice President -
Corporate Affairs
Strand Partners Limited Tel: +44 (0)20 7409 3494
Simon Raggett / Matthew Chandler
Financial Dynamics Tel: +44 (0)20 7831 3113
Ben Brewerton / Susan Quigley
Additional Information on PetroLatina Energy Plc
PetroLatina Energy Plc (AIM: PELE), formerly known as Taghmen Energy Plc, was founded in 2004. The Company is presently focused on
Colombia after the sale of its assets in Guatemala in which it retains a 20% interest in three wells to be drilled in the near future. In
Colombia, the Company holds 40% and 20% interests in the Los Angeles and Santa Luc fields on the Tisquirama licence, respectively, and a
100% interest in the DoMar field which together provided a daily production of approximately 450 barrels per day in the first six months of
2007. In November 2007 the Company secured the extension of the Tisquirama licence for the economic life of the fields. In April 2006 the
Group acquired an interest in two exploration blocks with an 85% interest in Midas and an 80% interest in La Paloma. PetroLatina also owns
the R Zulia-Ayacucho pipeline in the prolific Catatumbo basin which transports crude oil. Present exploration/exploitation activities in
this area should increase the volume of the crude oil resulting in an increased cash flow. Further information is available on the Company's website (www.petrolatinaenergy.com).
Glossary of technical terms:
2P the sum of Proved Reserves plus Probable Reserves.
3P the sum of Proved, Probable and Possible Reserves.
Boe gas is converted to barrels of oil equivalent at the
standard ratio of 1 barrel of oil = 6 thousand cubic feet
of natural gas.
NPV10 the net present value of estimated future revenues to be
generated from the production of P2 reserves and
discounted using an annual discount rate of 10%.
Possible Reserves those unproved reserves which analysis of geological and
engineering data suggests are less likely to be
recoverable than probable reserves. In this context, when
probabilistic methods are used, there should be at least
a 10% probability that the quantities actually recovered
will equal or exceed the sum of estimated Proved plus
Probable plus Possible reserves.
Probable Reserves those unproved reserves which analysis of geological and
engineering data suggests are more likely than not to be
recoverable. In this context, when probabilistic methods
are used, there should be at least a 50% probability that
the quantities actually recovered will equal or exceed
the sum of estimated Proved plus Probable reserves.
Proved Reserves those quantities of petroleum which, by analysis of
geological and engineering data, can be estimated with
reasonable certainty to be commercially recoverable, from
a given date forward, from known reservoirs and under
current economic conditions, operating methods and
government regulations. Proved reserves can be
categorised as developed or undeveloped. If deterministic
methods are used, the term reasonable certainty is
intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods
are used, there should be at least a 90% probability that
the quantities actually recovered will equal or exceed
the estimate.
SPE The Society of Petroleum Engineers.
Unproved Reserves based on geologic and/or engineering data similar to that
used in estimates of proved reserves; but technical,
contractual, economic or regulatory uncertainties
preclude such reserves being classified as proved.
Unproved reserves may be further classified as probable
reserves and possible reserves.
WPC World Petroleum Congress.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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