CALGARY, March 16 /CNW/ - Calvalley Petroleum Inc. (TSX: CVI.A)
RESERVES ADDITIONS
- 42% increase (53% increase including produced reserves in 2008) in
Proved oil reserves to 11.5 MMbbl
- 50% increase (55% increase including produced reserves in 2008) in
Proved plus Probable oil reserves to 24.6 MMbbl
- 51% increase (55% increase including produced reserves in 2008) in
Proved plus Probable plus Possible oil reserves to 35.4 MMbbl
CAPITAL EFFICIENCY
- Year 2008, F&D cost per barrel was $3.76(1P), $0.46 (2P), and
$0.05(3P)
- Three year average, F&D cost per barrel for was $12.89 (1P),
$5.37(2P) and $0.46/bbl (3P)
- 1064 % Reserve Replacement Ratio and 29 year reserve life Index (2P)
NET ASSET VALUE: Excluding resources in Yemen and Ethiopia.
- NAV per share (10% after tax) increased to C$4.55(2P) and C$4.93 (3P)
- NAV per share (8% after tax) increased to C$5.66 (2P) and C$6.25 (3P)
Calvalley Petroleum Inc. ("Calvalley" or the "Company"), announces that its Board of Directors has accepted a reserves report prepared by McDaniel and Associates ("McDaniel"), independent oil and natural gas reservoir engineers, that has evaluated all of Calvalley's crude oil reserves. As at December 31, 2008, McDaniel estimates gross working interest Proved plus Probable reserves for the Company to be 24.6 MMbbl, representing an increase of 50% (55% including produced reserves in 2008) over the quantities estimated by McDaniel at December 31, 2007, and a reserves replacement ratio of 1064%.
Capital efficiency for the new reserves is in the top decile of the industry. Finding and Development ("F&D") costs for the full year were $3.76 per barrel on Proved basis and $0.46 per barrel on Proved plus Probable basis. Average F&D costs over the past three years, remained solid at $12.89 per barrel on Proved basis and $5.37 per barrel on Proved plus Probable basis.
The new reserves additions were largely the result of pool extensions and improved recovery at both the Hiswah and Roidhat fields. Natural gas and associated liquids were not included in the reserves. In addition, the Qarn Qaymah discovery (wells 1 and 2) was not included in 2008 reserves due to the early stage of the discovery and insufficient production data. Despite the slower than expected pace of work at Qarn Qaymah, Calvalley is optimistic about the prospectivity of the discovery. Therefore, the necessary completion and testing equipment has been mobilized to fully appraise the Qarn Qaymah wells in both the fractured granitic basement and the Kohlan sands.
A summary of the Reserves Report is provided in the table below. Details of the Reserves Report will be included in the Annual Information Form ("AIF") which will be available, through the Company's website at www.calvalleypetroleum.com and through www.sedar.com, before the end of March. Unless otherwise indicated, the reserves estimates in this release are based on "forecast prices and costs" and are gross working interest Proved plus Probable estimates. Except as otherwise indicated, references to "$" and to "dollars" refer to the currency of the United States of America.
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Reserves and NPV
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NPV NPV
(10% after (8% after
---------- ---------
Reserves tax) tax)
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Net (after
Royalty &
Gross (WI) tax)
Proved (MMbbls) (MMbbls) ($MM) ($MM)
-------- -------- ----- -----
Developed producing 3.1 1.8 63.2 66.22
Developed non-producing 2.2 1.0 26.8 28.60
Undeveloped 6.2 2.8 59.4 66.10
Total Proved 11.5 5.6 149.4 160.92
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Probable 13.1 5.6 127.9 145.34
Total Proved + Probable 24.6 11.2 277.3 306.26
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Possible 10.8 4.4 86.2 102.80
Total Proved + Probable +
Possible 35.4 15.6 363.5 409.06
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(x) Based on McDaniel forecast prices (Jan 2009 Forecast)
Calvalley Petroleum is an international oil and gas company based in Calgary, Alberta. The Company operates its 50% working interest in Block 9 in the Masila Basin of the Republic of Yemen and 100% working interest in the Gimbi and Metema Blocks in Ethiopia.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release may contain forward-looking statements including, without limitation, financial and business prospects and financial outlooks, and such statements may be forward-looking statements which reflect management's expectations regarding future plans and intentions, growth, results of operations, performance and business prospects and opportunities. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof.
Forward-looking statements and other information contained herein concerning the oil and gas industry and Calvalley's general expectations concerning this industry are based on estimates prepared by management using data from publicly available industry sources as well as from reserve reports, market research and industry analysis and on assumptions based on data and knowledge of this industry which Calvalley believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While Calvalley is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors.
%SEDAR: 00001745E
