Verenex Energy Inc. has announced the results of a third party assessment of oil and gas contingent and prospective resources in Area 47 in Libya.
DeGolyer and MacNaughton ("DM") has completed an initial assessment of oil and gas resources in the Company's portfolio of discoveries and exploration prospects in Area 47 effective February 1, 2008. The assessment conforms to Canadian Securities National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Gross contingent (discovered) and prospective (undiscovered) oil and gas resources in Area 47 are expressed in the tables below as a range of estimates.
In summary, the aggregate of DM's best estimate of gross contingent resources and risked mean estimate of gross prospective resources is approximately 1.6 billion barrels of oil equivalent.
The DM best estimate of Area 47 gross contingent oil resources discovered in the Lower and Middle Acacus Formations is approximately 340 million barrels. This estimate is based on results from seven exploration and appraisal wells (six discoveries at A1, B1, C1, D1, E1 and F1-47/02 and one appraisal well A2-47/02) drilled by Verenex in Block 2 in the southern part of Area 47. The best estimate of gross contingent raw gas resources discovered in the Lower Acacus and Middle Acacus Formations is approximately 342 billion cubic feet. On an oil equivalent basis, the best estimate of gross contingent resources is approximately 396 million barrels.
Area 47 Gross Prospective Resources
The DM unrisked mean estimate of Area 47 gross prospective oil resources in the Lower Acacus Formation only is approximately 2.4 billion barrels associated with 34 exploration prospects and leads. The unrisked mean estimate of gross prospective raw gas resources in the Lower Acacus Formation is approximately 1.7 trillion cubic feet. On an oil equivalent basis, the mean unrisked estimate of gross prospective resources is 2.7 billion barrels.
The corresponding geologic risk-adjusted mean estimates of gross prospective resources in the Lower Acacus Formation are 1.1 billion barrels of oil and 0.8 trillion cubic feet of raw gas, or 1.2 billion barrels of oil equivalent.
Commenting on the resource assessment, Jim McFarland, President and CEO of Verenex, said, "The DM assessment confirms that Verenex has established a world class resource base in Area 47. We believe that the current discovered resources are sufficient to underpin an initial development phase of approximately 50,000 bopd (gross) and excellent potential exists to grow production above this floor. We remain tremendously excited about the future for Verenex given this resource outlook."
This initial assessment reflects information available at the end of January 2008 including drilling results from seven Verenex wells and exploration prospects and leads mapped utilizing extensive seismic coverage in Area 47 including 3D and 2D seismic shot by Verenex in 2006. As previously announced on July 23, 2008, Verenex has since drilled and cased an additional six wells (13 wells in total) and shot additional 3D and 2D seismic in late 2007 and early 2008. These more recent results have not as yet been reflected in the resource assessment.
The DM assessment excludes any resources associated with pre-existing oil discoveries at A1-NC3A and G1-NC02 located within or on the boundary of Block 2 in Area 47. The Libyan National Oil Corporation ("NOC") has advised that certain areas around these discoveries are unavailable to Verenex for exploration or exploitation under the current terms of the Area 47 Exploration and Production Sharing Agreement.
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