CALGARY, ALBERTA--(Marketwired - Sep 26, 2013) - Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSX VENTURE:BOE) is pleased to announce the results of its updated assessment of its conventional oil and gas reserves on the Medanito Sur block located in Argentina's Neuquen Basin. After a successful conventional drilling program during the first half of 2013, Chapman Petroleum Engineering Ltd. ("Chapman"), an independent petroleum engineering company, was engaged to prepare an independent reserve report ("Chapman Report") of the Company's conventional reserves in the Medanito Sur block. The Chapman Report was effective July 1, 2013 (as of June 30, 2013).
This conventional reserves update on the Medanito Sur block contained in the Chapman Report, is in addition to the evaluation of the Company's blocks with potential for unconventional resources, prepared by another independent engineering company (see the Company's news release dated August 22, 2013 announcing estimated recoverable resources of 8.3 billion barrels of oil equivalent).
Mid-Year Medanito Sur Reserves Report Highlights
- Significant increase in all reserve categories;
- Medanito Sur proved plus probable reserves growth of 41%, increasing from 3,017,000 barrels of oil at December 31, 2012 to 4,247,000 barrels of oil (net company working interest) at June 30, 2013;
- Medanito Sur proved plus probable before-tax net present value (discounted at 10%) of US$165.8 million at June 30, 2013 compared to US$116.4 million at December 31, 2012; and
- As a result of this updated reserves evaluation of Medanito Sur block, the Company-wide conventional proved plus probable before-tax net present value (discounted at 10%) is US$243.8 million at June 30, 2013 compared to US$194.4 million at December 31, 2012 (conventional only), representing an increase of US$49.4 million.
For an analysis, including the impact on the Company-wide reserves and net present values, please refer to the Company's Material Change Report dated September 26, 2013 filed on www.sedar.com or the Company's website at www.americaspetrogas.com.
The following table summarizes information contained in the Chapman Report with comparatives to the year ended December 31, 2012. Not included in the Chapman Report are any of the blocks with potential for unconventional resources since these hydrocarbons are separately evaluated by another independent engineering company (see the Company's news release dated August 22, 2013 announcing estimated recoverable resources of 8.3 billion barrels of oil equivalent).
The recovery and reserve estimates of oil and gas reserves on Medanito Sur provided in this news release are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual oil and gas reserves on Medanito Sur may eventually prove to be greater than, or less than, the estimates provided herein. All reserves in the Chapman Report are based on Chapman's forecast pricing effective July 1, 2013. All amounts are in United States dollars unless otherwise noted.
Medanito Sur Updated Reserves (Net to Americas Petrogas)
|Net Light Oil Reserves||Net Gas Reserves||Net Present Value |
Discounted at 10% Before-Tax(3)
|December 31, 2012 MSTB(1)||June 30, 2013 MSTB(1)||Percentage Increase||December 31, 2012 MMscf(2)||June 30, 2013 MMscf(2)||Percentage Increase||December 31, 2012 (Millions of US Dollars)||June 30, 2013 (Millions of US Dollars)||Percentage Increase|
|Proved + Probable||3,017||4,247||+41||%||1,703||2,297||+35||%||$||116.4||$||165.8||+42||%|
|Proved + Probable + Possible||11,625||12,502||+8||%||6,517||7,752||+19||%||$||380.7||$||548.6||+44||%|
- MSTB = Thousands of stock tank barrels of oil.
- MMscf = Millions of standard cubic feet.
- The forecast prices used in the calculation of the present value of future net revenue are based on the Chapman June 30, 2013 price forecast.
Company Updated Reserves and Reserves Replacement
Based on these updated reserves and the oil production in the first six months of 2013 of approximately 422,000 barrels, the Company has achieved, in Medanito Sur, an Oil Reserves Replacement of 178% on Proved reserves and 391% on Proved plus Probable reserves.
Barclay Hambrook, President and CEO, said, "We are very pleased with our increased reserves on Medanito Sur and significant reserves replacement measured on accumulated production in the first half of 2013. As well, we are happy to be getting higher prices on our production in the range of US$80 and netbacks in the range of US$45, even before considering Oil Plus benefits."
The Company also announces that it has updated its corporate presentation which can be viewed on its website at www.americaspetrogas.com.
About Americas Petrogas Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has conventional and unconventional shale oil and gas and tight sands oil and gas interests in numerous blocks in the Neuquén Basin of Argentina. Ryder Scott Company of Houston has completed an independent report dated June 30, 2013 for the Company estimating recoverable resources of 8.3 Billion Barrels of oil Equivalent (see Americas Petrogas News Release dated August 22, 2013 including important disclosures). Americas Petrogas has joint venture partners, including ExxonMobil and Apache, on various blocks in the shale oil and gas corridor in the Neuquén Basin, Argentina.
This News Release contains forward-looking information including, but not limited to, estimates of reserves, production and cash flows. Additional forward‐looking information is contained in the Company's Annual MD&A for December 31, 2012 and interim MD&A for June 30, 2013, and reference should be made to the additional disclosures of the assumptions, risks and uncertainties relating to such forward‐looking information in those MD&A documents.
Forward‐looking information is based on management's expectations regarding the Company's future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity (including the timing, location, depth and the number of wells), environmental matters, business prospects and opportunities and expectations with respect to general economic conditions. Such forward‐looking information reflects management's current beliefs and assumptions and is based on information, including reserves information, currently available to management. Forward‐looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward‐looking information, including but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes to plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environment risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and third parties located in foreign jurisdictions and the risk associated with international activity.
Although the forward‐looking information contained herein is based upon assumptions which management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with this forward-looking information. This forward‐looking information is made as of the date hereof and the Company assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. Because of the risks, uncertainties and assumptions inherent in forward‐looking information, prospective investors in the Company's securities should not place undue reliance on this forward‐looking information.
Where applicable, natural gas has been converted to barrels of oil equivalent ("BOE") based on 6 Mcf:1 BOE. The BOE rate is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalent at the wellhead. Use of BOE in isolation may be misleading.
The Chapman Report and the Company's reserve estimates have been prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Accordingly, the Company classifies its reserves as proved, probable or possible. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable - it is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves - it is equally likely that the actual remaining quantities recovered will be greater or less than the sum of estimated proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves - it is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered.
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