Capitola Oil Project Reserves
Brisbane, Aug 13, 2015 AEST (ABN Newswire) - Pryme Energy Limited (
ASX:PYM) (POGLY:OTCMKTS) is pleased to provide details of its Capitola Oil Project 1P and 2P certified Reserves effective July 1, 2015.
HIGHLIGHTS
- 1.1 million BOE (proved and probable) certified reserves net to Pryme
- Demonstrates US$12 million NPV10 to Pryme in current market
In Summary, the Capitola Oil Project 1P and 2P Reserves are estimated to be 1.1 million barrels of oil equivalent with a NPV10 of US$12.1 million. The estimates apply to approximately 16% of the Capitola Oil Project's 9,333 gross acres (based on 37 wells using 40 acre spacing), more extensive reserve estimates will be made after further field development.
The Reserves estimates shown below include 1P (Proved) and 2P (Probable) Reserves; they do not include 3P and contingent resource categories. Future net income to Pryme attributable to the Reserves has also been estimated and is shown in the table below.
The Reserves and future income estimates were determined by Hickman McClaine & Associates, Inc. (Hickman McClaine), Registered Engineers in the state of Texas, in accordance with the Society of Petroleum Engineers, 2007 Petroleum Resources Management System.
"We are very pleased with the inaugural reserve report from our Capitola Oil Project, even in this current commodity price environment," said Justin Pettett, Pryme's Managing Director. "We are currently trading significant potential of our newly acquired Newkirk Project in the Mississippian, Oklahoma."
"We remain focused on executing our operational strategy as we demonstrate the potential of the Newkirk project in the coming months and continue to increase our position in low cost, high margin basins throughout the United States."
Reserve Methodology and Assumptions
Oil volumes are generally expressed in thousands of stock tank barrels (MBO), where one barrel is equivalent to 42 United States gallons. Gas volumes are expressed in millions of standard cubic feet (MMCF) at 60 degrees Fahrenheit and the contract pressure base.
Net income is determined by deducting capital costs, operating expenses, severance and ad valorem taxes, and mineral owner royalties from revenue. The net present value of future income has been determined at a discount rate of 10% (NPV10).
Oil and gas prices are based on NYMEX crude oil (West Texas Intermediate) and the NYMEX natural gas (Henry Hub) five-year strip futures prices as of July 1, 2015. Oil price estimates range from US$57.74 per barrel in 2015 to US$65.85 per barrel in 2019 and thereafter. Natural gas prices range from US$2.89 per MCF in 2015 to US$3.51 per MCF in 2019 and thereafter. Oil and gas prices were adjusted for differences between the futures market commodity price and the wellhead netback price to account for product quality and transportation.
The barrel of oil equivalent (BOE) is a unit of energy based on the approximate energy released by burning one barrel (42 U.S. gallons or 158.9873 litres) of crude oil. One barrel of oil is generally deemed to have the same amount of energy content as 6.1 Mcf of natural gas.
Operating and capital costs are based on actual expenses, as provided by Pryme. Hickman McClaine did not confirm the accuracy of these expenses.
Reserve estimates were based on established performance trends, pore-volume analysis and analogy to similar fields. The reserves presented in this report are estimates only and should not be construed as being exact quantities. They may or may not be recovered and, if recovered, the revenues, costs, and expenses therefrom may be more or less than the estimated amounts.
Because of governmental policies, uncertainties of supply and demand, and international politics, the actual sales rates and the prices actually received for the reserves, as well as the costs of recovery, may vary from the assumptions included in this report. In addition, estimates of reserves may increase or decrease as a result of future operational decisions, mechanical problems, the price of oil and gas and / or economic limits due to the latter.
All reserve estimates have been carried out in accordance with sound engineering principles and generally accepted industry practice. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering data and all conclusions only represent informed professional judgments.
The titles to the properties have not been examined by Hickman McClaine, nor has the actual degree or type of interest owned been independently confirmed. The data used in the estimates were obtained from Pryme and from other sources which provide publicly accessible data and are considered accurate.
Reserve Certification
The information in this report has been compiled by the President of Hickman McClaine & Associates Inc. of Midland Texas, Stephen J. McClaine, who has over 30 years experience in petroleum engineering. Mr. McClaine holds a Bachelor of Engineering Degree in Petroleum Engineering from Texas Tech University. He is a member of Society of Petroleum Engineers and the West Texas Geological Society.
Mr McClaine consents to the inclusion of the estimated hydrocarbons in place in the form and context in which they appear. The reserve and resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resources Management System, 2007. Further information is available at www.spe.org.
Mr. McClaine has been commissioned as an independent consultant to Pryme and has no interest in Pryme securities nor has any interest in any of the projects in which Pryme is involved.
About the Capitola Oil Project
The Capitola Oil Project is located in an active region of the Eastern Shelf of the Permian Basin just north of the town of Sweetwater, Texas. The project contains a number of shallow, "stacked" formations to depths of 7,500 feet, with established oil production history from vertical wells. The Capitola Oil Project acreage is contained within two contiguous lease blocks referred to as Sweetwater (approx. 7,000 acres) and Claytonville (approx. 2,333 acres) to the north of Sweetwater.
To view tables, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-PYM-872239.pdf
About Indago Energy Ltd
Indago Energy Ltd (ASX:INK) (OTCMKTS:POGLY) is an Australian listed company engaged in oil and gas exploration, development and production. Indago's project portfolio includes liquid rich producing assets together with substantial oil development and exploration acreage in the United States.
The Company's Exploration and Production focus is on high growth oil and gas projects offering scalability of production, cash flows and reserves. Indago currently has several producing projects together with a significant acreage position. The Company's immediate focus is the development of its Capitola Oil Project located in an active region of the Cline Shale resource play along the Eastern Shelf of the Permian Basin, Texas. The project's core development and exploitation opportunities are shallower multiple "stacked" sandstones and limestones to depths of 7,000 feet which are effectively produced from vertically drilled wells. Indago's value driven model is executed through exploiting shallower, well defined intervals with advanced completion and stimulation technology within known produced oil fields together with exposure to the emerging Cline Shale resource play.
Indago's shares are publicly traded on the Australian Securities Exchange (ASX ticker: INK) and also as American Depositary Receipts on the OTCQX (ADR ticker: POGLY).
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