The report is the first full re-evaluation of Aminex's US properties to be undertaken for three years and was commissioned by Aminex following participation in joint venture drilling at South Weslaco, Texas, engineering and enhancement work at the Shoats Creek field, Louisiana, and geological work in preparation for further drilling at Alta Loma, Texas. The re-evaluation reflects the effects of new drilling activity and a strong overall improvement in commodity prices.
The OPC report identifies total reserves of 5,438,000 barrels of oil equivalent, of which 871,300 are categorized as "proved" and 4,566,300 as "probable." No "possible" category has been included. In comparison, the total barrels of oil equivalent at end 2003 was 2.6 million.
Using a discount factor of 10% and commodity prices going forward from 2010 not exceeding $61.12/barrel for crude oil and $7.53/mcf for natural gas, the combined value of all the US properties for Proved and Probable (2P case) is $84,516,500.
New drilling is planned at Alta Loma and South Weslaco, Texas, in 2007 while at Shoats Creek, Louisiana, Aminex will be entitled to receive new 3D seismic data free of charge from Forest Oil in return for permitting a 3D seismic survey to be carried out over its property. Given the difficulty of the terrain at Shoats Creek, an area of swamp and deep forestation, and the high cost of 3D seismic under such conditions, the new data will be a valuable tool for Aminex in its plans for further drilling at Shoats Creek. The new 3D data is likely to be available mid-2007.
The GU#37 well, South Weslaco, Texas, drilled last year, encountered multiple gas-bearing sands in the Lower Frio formation but was specifically aiming for a deeper Frio target than previously drilled. Efforts to produce from this deeper target have so far not been successful. If the deeper zone cannot ultimately be produced, plans are in place to plug it off and complete the well for production in a shallower zone. Aminex USA Inc. has a 12.5% working interest in GU#37 and partners are: Apache Corporation (50%), Stalker Energy LP (24.5%) (operator), Activa Resources LLC (12.5%) and Kaler Energy Corp (0.5%). Aminex USA Inc. holds a 25% working interest in the other wells drilled at South Weslaco during the current program that are currently producing.
Commenting on the US operations, Aminex Chief Executive Brian Hall said:
"We are very pleased to note the upgrading of our 2P reserves in the USA as reported by OPC's engineers in their new study. The US assets strongly underpin our international portfolio, which is focused on the upside potential of the East African margin. Most of our efforts and resources are now directed towards progressing the East African exploration program to the next stage in a region which is attracting an increasing level of industry attention."
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