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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Petrolatina | LSE:PELE | London | Ordinary Share | GB00B2QMZ536 | ORD USD0.10 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 19.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMPELE
RNS Number : 5962F
Petrolatina Energy PLC
28 April 2011
28 April 2011
PetroLatina Energy Plc
("PetroLatina" or the "Company")
Resource Update
Proved, Probable and Possible Reserves Independently Valued at $280 million
PetroLatina (AIM: PELE), the 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 31 December 2010.
Ryder Scott reported that as at 31 December 2010:
- Proven Net Reserves of the Company stood at 3.518 million barrels of oil ("bbls") (30 November 2009: approximately 3.359 million bbls), representing replacement of approximately 105% of the Proven Reserves produced in the period between the two reports.
- Proved gas reserves contained in the Serafin field stood at 1.33 billion cubic feet ("Bcf") (30 November 2009: approximately 1.15 Bcf). As announced recently, the Serafin-1 gas well was placed on extended test production in late March 2011.
- Probable Net Reserves of the Company stood at 2.147 million bbls (30 November 2009: approximately 2.537 million bbls). This decrease occurred almost entirely in the Santa Lucia field and resulted from a combination of Ryder Scott assuming a lower ultimate recovery factor than in the past for the producing La Paz formation and revised lower production rate expectations for the same formation as a result of additional production rate history acquired since the previous report. In its current report Ryder Scott has designated two additional locations in the Santa Lucia field as Proven, however, these are not reflected in the Proven or Probable Reserves figures as PetroLatina has not submitted a drilling programme and development plan for these two locations to date. As the Company holds a relatively small (14% net after royalty) interest in this field compared to its interest in other fields (such as Colon where it holds a 78.2% net interest after royalty) management currently intends focusing the Company's resources and capital expenditure on such other higher impact fields in the near term.
- In accordance with the above, the 2P (Proven plus Probable) Reserves of the Company as at 31 December 2010 were 5.88 million barrels of oil equivalent ("boe") (30 November 2009: approximately 6.09 million boe) comprising 5.665 million bbls of oil and 1.33 Bcf of gas (30 November 2009: approximately 5.896 million bbls and 1.15 Bcf).
- Possible Net Reserves of the Company stood at 4.005 million bbls (30 November 2009: approximately 5.316 million bbls). The decrease in this category results primarily from the removal, by Ryder Scott, of previously designated Possible Reserves in the deeper Umir formation in the Santa Lucia field. Although the Umir formation there is known to be oil bearing on the basis of drill stem tests conducted when the wells were initially drilled, the fact that the Company has not yet submitted a development plan for the development of these deeper reserves has prompted this revision. As mentioned above with regards to the Santa Lucia Probable Reserves, the Company holds much higher interests in its other producing fields and accordingly intends to concentrate its efforts and financial resources on these higher impact fields in the near term.
- In accordance with the above, the 3P (Proven plus Probable plus Possible) Reserves of the Company as at 31 December 2010 were 9.9105 million barrels of oil equivalent ("boe") (30 November 2009: approximately 11.406 million boe) comprising 9.671 million bbls of oil and 1.33 Bcf of gas (30 November 2009: approximately 11.212 million bbls and 1.15 Bcf).
The Ryder Scott report has provided a clear basis for the formulation of future drilling plans and consequent production rate and reserves increases. It defined a significant number of 'Proven Undeveloped' future drilling locations, including four at the Colon field and seven at the Querubin field. At Querubin, recent drilling results and the use of a more effective production method (a progressive cavity pump) has proved that a gross production rate of approximately 150bbls per day can be maintained in an area where wells with thick oil pay were previously found to be unproduceable due to sand production problems.
The Company's Proven hydrocarbon reserves comprise approximately 94% oil and 6% gas.
Prospective Resources based on a Ryder Scott review of the Company's exploration portfolio, and which found that its exploration methods and estimates were reasonable, are estimated as at 31 December 2010 to be approximately 22.8 million barrels of gross recoverable oil (8.72 million barrels net to the Company) on an unrisked basis. These Prospective Resources principally relate to resources potentially recoverable from:
(a) Additional development drilling in the Santa Lucia field where considerable resources appear to exist in the Lisama formation. Ryder Scott's petrophysics indicate that this formation contains untested potentially oil bearing pay zones. This area is held under Association Contract terms and the Company has a 17.5% working interest (14% net after royalty) in this concession.
(b) The Juglar , Colon deep and shallow Prospects located on the La Paloma Block which is held under an Agencia Nacional de Hidrocarburos ("ANH") contract and in which the Company has an 85% working interest (78.2% net after royalty).
(c) The Putumayo-4 Block granted under ANH terms and in which the Company holds a 50% working interest. This block contains two exploration leads over which new seismic acquisition is planned in July 2011 and drilling is planned within the next 18 months, once community consultation ends and an environmental licence is approved.
In addition to the above, and not included in Ryder Scott's review, PetroLatina has mapped several leads in its VMM28 block which lies adjacent to the Company's currently producing acreage. This block was granted under ANH terms in mid 2010 and is now under exploration.
NPV10
Based upon the average oil price received in 2010 ($79.43 per barrel) and as adjusted to actual prices received by the Company 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 $94.5 million (30 November 2009: $71 million). The NPV10 of the 2P reserves totalled $138.8 million (30 November 2009: $140.3 million) and the NPV10 of the 3P reserves totalled $280.6 million (30 November 2009: $247.0 million).
The above NPV10 valuations do not take account of the exploration potential in respect of the Company's interests in Colombia 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.
Juan Carlos Rodriguez, Chief Executive Officer of PetroLatina, said:
"We believe the recently completed Ryder Scott report, combined with the various technical studies now nearing completion by other third party specialist consultants, provides the Company with a clear road map for further drilling later this year. I am confident that such additional drilling in a more effective and low risk manner will ultimately result in significantly increased production and reserves."
A copy of the executive summary from Ryder Scott's report will shortly be made available 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, inter alia, both the Society of Petroleum Engineers ("SPE") and the World Petroleum Council ("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 30 years and a Member of the Geological Society for more than 7 years.
Enquiries:
PetroLatina Energy Plc Tel: +57 1627 8435 Juan Carlos Rodriguez, Chief Executive Officer Pawan Sharma, Executive Vice President - Corporate Tel: +44 (0)20 7766 0081 Affairs Strand Hanson Limited Simon Raggett / Matthew Chandler Tel: +44 (0)20 7409 3494 Evolution Securities Limited Chris Sim / Adam James Tel: +44 (0)20 7071 4304 Financial Dynamics Ben Brewerton / Susan Quigley Tel: +44 (0)20 7831 3113
Glossary of key technical terms:
2P the sum of Proved Reserves plus Probable Reserves. 3P the sum of Proved, Probable and Possible Reserves. AAPG American Association of Petroleum Geologists 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 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. Prospective Resources those quantities of petroleum which are estimated, 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 recognised that the development programmes will be of significantly less detail and depend more heavily on analogue developments in the earlier phases of exploration. Proved Reserves or those quantities of petroleum which, by analysis of 1P 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 Council.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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