Cano Petroleum Updates Proved Reserve Estimates
Cano Petroleum has revised its proved reserve estimates upward based on the fiscal year-end report prepared by Forrest A. Garb & Associates. As shown in the table below, Cano's SEC PV-10% total proved reserve value increased to $46.3 million as of June 30, 2005, from $1.5 million, as of June 30, 2004. The net change in present value was primarily due to acquisitions, as well as reserve additions from enhancements, drilling, reserve revisions and increased oil and natural gas prices.
June 30, December 31, June 30, 2005 2004 2004 ------------ ------------ ----------- Total Proved Reserves: Oil (Mbbls) 3,056 2,758 213 Gas (Mmcf) 10,388 5,014 0 ------------ ------------ ----------- Proved Barrels of Equivalent Oil (MBOE) 4,787 3,594 213 Pre-tax PV-10% $46,300,000 $34,092,000 $1,500,000
Jeff Johnson, Cano's Chairman and CEO, stated, "While increases in the first half of the year were mostly the result of acquisitions, we are especially pleased with the increases in production and reserves in the second half that were due to enhancements to these assets at the field level. We hope to maintain this trend by continuing to implement sound engineering practices in order to maximize our recovery efficiencies as we prepare these fields for their respective enhanced oil recovery programs."
In addition to its proved reserves, Cano estimates its probable
reserves to be approximately 41 MBOE which it will seek to reclassify
as proven reserves utilizing enhanced oil recovery (EOR) methods. The
company is in the third of three phases of laboratory analysis to
determine the formulation and methodology for the planned
surfactant-polymer flooding of its Nowata Field -- the first of its
assets scheduled for waterflooding and/or chemical EOR treatment. Cano
has three assets that meet specific criteria for waterflooding and/or
chemical EOR, including its Davenport and Nowata Fields in Oklahoma,
and its Desdemona Field in Texas.