Petroflow has announced the summary results of its year end December 31, 2008 reserve report, (the "Report") prepared by Haas Petroleum Engineering Services, Inc. ("Haas") as of January 1, 2009. The properties evaluated in the Report are located in Oklahoma, Texas and Alberta. The Report was prepared for the purpose of evaluating the Company's Petroleum and Natural Gas Reserves according to the Canadian Oil and Gas Evaluation Handbook (COGEH) with reserve definitions consistent with National Instrument 51-101 Standards of Disclosure for Oil & Gas Activities ("NI 51 - 101"). In preparing the Report, Haas utilized the January 1, 2009 Summary of Price Forecasts as prepared by McDaniel & Associates Consultants Ltd., an excerpt of which is included below.
All of Petroflow's reserves have been developed since August 2005. The Company initially acquired three producing properties with proved reserves of 1.6 million barrels of oil equivalent (boe) (proved plus probable reserves of 1.7 million boe) as of December 31, 2005. Since that time, continuing growth has occurred through drilling activities, mostly in the Company's Oklahoma Hunton Resource Play. Even after a 2008 property sale of approximately 2.7 million boe, the Company enjoyed a three year compounded growth rate in proved reserves of 249% (proved plus probable reserves of 264%).
All reserves added during 2008 can be attributed to successful drilling operations in Oklahoma. On a proved basis, the Company added 8.0 million boe to its reserves during the year before production and asset sales (9.0 million boe on a proved plus probable basis). The gross additions represented 39% and 34% growth of proved and proved plus probable reserves respectively from Company reserves as at December 31, 2007.
"While it is premature to assign reserves to our holdings in the new areas, we are aware of the completion of a number of wells in close proximity to one of our project areas that have tested at daily production levels of 2500 mcf per day" stated Petroflow COO, Sandy Andrew.
At December 31, 2008 proved plus probable reserves increased to 31.4 million boe from 26.2 million boe at December 31, 2007, an increase of 20%. Proved plus probable reserves using constant 2008 year end prices were 29.9 million boe.
Total proved reserves also increased to 24.7 million boe at December 31, 2008 compared to 20.4 million boe at December 31, 2007, an increase of 21%. Total proved reserves using constant 2008 year end prices were 22.7 million boe.
The value of before tax proved and probable reserves (NPV 10%) increased from $358.1 million to $603.0 million, based on forecast prices, an increase of 68%. The Report also quantified the NPV 10% value of proved plus probable reserves using December 31, 2008 constant prices at $247.3 million.
The value of before tax proved reserves (NPV 10%) increased from $300.6 million to $490.0 million, based on forecast prices, an increase of 63%. The Report also quantified the NPV 10% value of proved reserves using December 31, 2008 constant prices at $212.0 million.
All reserves added during 2008 can be attributed to successful drilling operations in Oklahoma.
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