Resource Update
February 08 2010 - 2:00AM
UK Regulatory
TIDMPELE
RNS Number : 7962G
Petrolatina Energy PLC
08 February 2010
8 February 2010
PetroLatina Energy Plc
("PetroLatina" or the "Company")
Resource Update
Proved, Probable and Possible Reserves Independently Valued at $247 million
PetroLatina (AIM: PELE), an independent oil and gas exploration, development and
production company focused on Latin America, 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 concessions in Colombia as at 30 November 2009.
Ryder Scott reported the following summary reserve estimations as at 30 November
2009:
+-------------------------+-----------+-----------+----------+
| RYDER SCOTT RESERVES REPORT: VOLUMES OF OIL AND GAS |
+------------------------------------------------------------+
| | Net Reserves To | |
| | Company | |
+-------------------------+-----------------------+----------+
| Reserves Category | At | At | Change % |
| | 31-Dec-07 | 30-Dec-09 | |
+-------------------------+-----------+-----------+----------+
| Proved Reserves | | | |
+-------------------------+-----------+-----------+----------+
| Oil (millions of | 2.54 | 3.36 | 32.3% |
| barrels) | 1.28 | 1.15 | -9.6% |
| Gas (Billions of cubic | | | |
| feet) | | | |
+-------------------------+-----------+-----------+----------+
| Total 1P (million boe): | 2.75 | 3.55 | 29.1% |
+-------------------------+-----------+-----------+----------+
| | | | |
+-------------------------+-----------+-----------+----------+
| Probable Reserves | | | |
+-------------------------+-----------+-----------+----------+
| Oil (millions of | 2.31 | 2.54 | 9.7% |
| barrels) | | | |
+-------------------------+-----------+-----------+----------+
| Total 2P (million boe): | 5.06 | 6.09 | 20.2% |
+-------------------------+-----------+-----------+----------+
| | | | |
+-------------------------+-----------+-----------+----------+
| Possible Reserves | | | |
+-------------------------+-----------+-----------+----------+
| Oil (millions of | 2.27 | 5.32 | 134.0% |
| barrels) | | | |
+-------------------------+-----------+-----------+----------+
| Total 3P (million boe): | 7.34 | 11.40 | 55.5% |
+-------------------------+-----------+-----------+----------+
As set out in the table above, the Company's proven hydrocarbon reserves
principally comprise approximately 95 per cent. oil and 5 per cent. gas.
Although reserves have increased across all categories, the largest increase is
in Possible Reserves, reflecting the Company's discovery during 2009 of
additional oil reserves at its Colon and Chuira fields. As these two fields are
in the early stages of development, the reserves assigned by Ryder Scott relate
only to that portion of the discovery for which well data is currently
available. The Directors anticipate that further drilling planned for 2010 will
serve to substantially increase these Possible Reserves as well as moving an
element of them into the Probable Reserves and Proved Reserves categories.
In addition to the increase in reserves reported above, the Company notes that
during the period from 31 December 2007 to 30 November 2009 it has produced and
sold a total of 0.273 million barrels of oil.
Ryder Scott's report also confirmed its 2007 Reserves Report finding to the
effect that significant 3P reserves remain to be developed and produced in the
Santa Lucia field. These amount of 3.415 million barrels recoverable net to the
Company. A further five development drilling locations have been identified in
Santa Lucia and the Company has therefore mobilised a rig to this field and is
currently drilling the Santa Lucia-4 well. Although the Company holds only a 20
per cent. interest in this field, the La Paz reservoir produces oil of higher
gravity and has higher production rates and greater ultimate per well recoveries
than those experienced in several of the Company's other operated fields, such
as Los Angeles.
Ryder Scott's study also reviewed the exploration prospects currently being
evaluated by PetroLatina and concluded that the Company's estimate that these
could contain approximately 19.24 million barrels of recoverable oil on an
unrisked basis was reasonable. These Prospective Resources principally relate to
resources potentially recoverable from: (a) the Zoe prospect on the PetroLatina
operated Midas block held under Colombia's Agencia Nacional de Hidrocarburos
("ANH") terms and which was drilled, logged and cased after the date of the
Ryder Scott report; (b) potential extensions to the existing PetroLatina
operated Santa Lucia field, where development drilling is now under way; (c)
resources potentially relating to a seismically defined structural prospect
known as the Santa Lucia Sur which is situated south of and on trend with the
producing Santa Lucia field; and (d) the extension to the south of that same
Santa Lucia Sur prospect into the PetroLatina operated La Paloma block. This
portion of the prospect has 3D seismic coverage and is known as Llamador. La
Paloma is also held under ANH terms and contains the Company's 2009 Colon
discovery.
An operational update in respect of the Zoe-1 exploration well is set out in a
separate announcement published today.
NPV10
Based upon crude oil futures prices as of 30 November 2009 adjusted for each
property, the Net Present Value at a 10 per cent. discount ("NPV10") of the
aforementioned Proved Reserves was estimated by Ryder Scott at $71 million
(December 2007: $47.7 million). The NPV10 of the 2P reserves totalled $140.3
million (December 2007: $108.8 million) and the NPV10 of the 3P reserves
totalled $247.0 million (December 2007: $164.9 million).
The above NPV10 valuations do not take account of the exploration potential in
respect of the Company's interests in Colombia and Guatemala which the Directors
believe could be substantial. Furthermore, Ryder Scott's assessment does not
include any valuation of the Company's Rio Zulia-Ayacucho pipeline asset in the
Catatumbo basin, which was valued at up to $30 million on a PV12 basis by
Gaffney Cline & Associates in 2006.
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina, said:
"We believe that Ryder Scott's report supports our view that PetroLatina has
significant potential to create value for its shareholders. The sizeable
increase in the value of our reserves reflects the eight successful wells
drilled by the Company in 2009. Our plan continues to be to convert our Probable
and Possible Reserves into Proved Reserves and considerably increase production
and cash flow through the ongoing drill programme."
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.
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.
Mr Menno Wiebe, a Non-executive director of the Company, has reviewed and
approved the technical information contained within this announcement in his
capacity as a qualified person, as required under the AIM rules. Mr Wiebe is a
Petroleum Geologist and has been a Member of the American Association of
Petroleum Geologists for more than 25 years and a Member of the Geological
Society for more than 5 years.
Enquiries:
+-----------------------------------------------+--------------------+
| PetroLatina Energy Plc | |
| Juan Carlos Rodriguez, Chief Executive | Tel: +57 1627 8435 |
| Officer | |
+-----------------------------------------------+--------------------+
| Pawan Sharma, Executive Vice President - | Tel: +44 (0)20 |
| Corporate Affairs | 7766 0081 |
+-----------------------------------------------+--------------------+
| | |
+-----------------------------------------------+--------------------+
| Strand Hanson Limited | |
+-----------------------------------------------+--------------------+
| Simon Raggett / Matthew Chandler | Tel: +44 (0)20 |
| | 7409 3494 |
+-----------------------------------------------+--------------------+
| | |
+-----------------------------------------------+--------------------+
| Evolution Securities Limited | |
+-----------------------------------------------+--------------------+
| Rob Collins / Chris Sim | Tel: +44 (0)20 |
| | 7071 4304 |
+-----------------------------------------------+--------------------+
| | |
+-----------------------------------------------+--------------------+
| Financial Dynamics | |
+-----------------------------------------------+--------------------+
| Ben Brewerton / Susan Quigley | Tel: +44 (0)20 |
| | 7831 3113 |
+-----------------------------------------------+--------------------+
Additional Information on PetroLatina Energy Plc:
PetroLatina Energy Plc (AIM: PELE) is presently focused on Colombia where it
currently holds 45% and 20% interests respectively in the Los Angeles and Santa
Lucía fields on the Tisquirama licence, and a 100% interest in the Doña María
field. 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: an 85% interest in Midas and an 80% interest
in La Paloma. PetroLatina also owns the Río Zulia-Ayacucho pipeline in the
prolific Catatumbo basin which transports crude oil. Present
exploration/exploitation activities in this area should increase the volume of
crude oil transported resulting in an increased cash flow. Having sold its
assets in Guatemala PetroLatina retains a 20% interest in the first three wells
and a 20% working interest in future wells. Further information is available on
the Company's website (www.petrolatinaenergy.com).
Glossary of key 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 reserves |
| | discounted using an annual discount rate of 10%. |
| | |
+-------------+-----------------------------------------------------+
| Possible | those unproved reserves which analysis of |
| Reserves | 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 | those unproved reserves which analysis of |
| Reserves | 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. |
| | |
+-------------+-----------------------------------------------------+
| Prospective | those quantities of petroleum which are estimated, |
| Resources | as of a given date, to be potentially recoverable |
| | from undiscovered accumulations. Potential |
| | accumulations are evaluated according to their |
| | chance of discovery and, assuming a discovery, the |
| | estimated quantities that would be recoverable |
| | under defined development projects. It is |
| | recognized that the development programmes will be |
| | of significantly less detail and depend more |
| | heavily on analogue developments in the earlier |
| | phases of exploration. |
| | |
+-------------+-----------------------------------------------------+
| Proved | those quantities of petroleum which, by analysis of |
| Reserves | geological and engineering data, can be estimated |
| or 1P | 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 | based on geologic and/or engineering data similar |
| Reserves | 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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