Novatek announced that independent petroleum engineers, DeGolyer and MacNaughton (D&M), have completed their comprehensive reserve appraisals of the Company's oil and gas reserves as of December 31, 2010. The Company added approximately 1,509 million barrels of oil equivalent (boe) of proved reserves under SEC reserves reporting methodology (SEC standards), inclusive of 2010 production, and produced approximately 274 million boe during the year.
Estimated total proved reserves (according to SEC standards) as of December 31, 2010 increased to 8,088 million boe from 6,853 million boe as of year-end 2009. Total proved reserves of natural gas increased from 967 billion cubic meters (bcm) in 2009 to 1,144 bcm in 2010, or by 214 bcm, inclusive of the Company's 2010 production. The increase in proved reserves was mainly attributable to organic reserve growth, including development and exploration drilling at the Yurkharovskoye field, revisions at the South-Tambeyskoye field, discovery of the Severo-Russkoye field and reserve growth through the acquisitions of SeverEnergia and Sibneftegas in November and December 2010, respectively.
In 2010, on a barrel of oil equivalent basis, NOVATEK recorded an approximately five-fold (551%) reserves replacement rate for its appraised fields under the SEC standards, and at year-end 2010, the Company's reserve to production ratio (or R/P ratio) was 30 years. The Company also recorded an approximately six-fold (577%) reserves replacement rate for natural gas while the R/P ratio increased to 31 years.
Under the Petroleum Resources Management System (PRMS) reserves reporting methodology, the Company's total proved reserves increased by 1,888 million boe, inclusive of 2010 production, and totaled 9,325 million boe, while proved plus probable reserves totaled 13,386 million boe as of 31 December 2010.
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