Petroflow Revises Reserves Estimate for Third Quarter '08
Petroflow has announced the summary results of an updated reserve report, prepared by Haas Petroleum Engineering Services, Inc. as of September 30, 2008. Highlights of the Report are stated in comparison to the status at June 30, 2008 with all dollar amounts in Canadian dollars unless otherwise stated (using a US dollar exchange rate of $USD 1.00 = $CAD 1.059).
The value of before tax proved and probable (P plus P) reserves (NPV 10%) decreased from $636.6 million to $605.1 million, based on forecast prices, a decrease of 5%. The net change in value is substantially due to using an updated price forecast with lower price projections.
The value of before tax proved reserves (NPV 10%) decreased from $435.5 million to $380.6 million, based on forecast prices, a decrease of 13%. The net change in value is due to the use of a more conservative price projection as mentioned above, as well as a partial reclassification from proved reserves to probable reserves.
All reserve changes during Q3 2008 can be attributed to successful drilling operations in the Company's Hunton Resource Play in Oklahoma.
The Company focused its drilling efforts in the three month period on converting proved and probable undeveloped reserves into proved producing reserves. As a consequence, as of September 30, 2008, P plus P reserves did not increase. Production in the current fiscal quarter of 0.3 million BOEs and a slight downward revision in previously engineered reserves of 0.1 million BOEs accounted for the net change in P plus P reserves during the period.
Petroflow's proved reserves declined in the quarter by 0.7 million BOEs due to a combination of production, reclassification of proved reserves to probable reserves and the previously mentioned downward revision.
Petroflow CEO, John Melton said, "During the course of development of a resource play such as the Hunton, there will always be an ebb and flow to the quantification of engineered reserves. During the three months ended September 30, 2008, we concentrated on drilling wells which had already been included in previous engineering reports. As a consequence, we did not add any specific wells to the pool of locations included in the current engineering report. Even with the modest decline in overall P plus P reserves in the most recent quarter, our overall P plus P reserves have increased by 6.4 million BOEs since December 31, 2007. On expansion of the play into new areas, we expect to add significant new reserves."
The Report also quantified the NPV 10% value of P plus P reserves using September 30, 2008 constant prices at $479.9 million. The NPV 10% value of proved reserves using September 30, 2008 constant price was $305.5 million. Reserve quantities were substantially the same as stated above.