Leed Petroleum announced the results of its recently completed reserve audit.
Collarini Associates, an independent reserve auditor, has audited Leed's reserves, effective as of January 1, 2010. The Company's net attributable reserves are set out immediately below:
Reserve auditor Collarini reported that reserves in the 1P, 2P and 3P categories all remained approximately in line with the previous audit, primarily a result of Leed's decision to temporarily suspend oil and gas development and exploration plans allowing the Company to conserve cash. Though necessary in the short run, this limited the Company's ability to add reserves during the six month period to December 31, 2009.
The Collarini reserve report used the NYMEX forward strip pricing as of December 31, 2009, which started with January 2010 pricing at $81.73, per barrel of oil and $5.77 per mmBtu of gas. Based upon these starting prices, the Net Present Value at a 10% discount of the proved reserves was $296 million. The NPV10 of the 2P reserves totalled $503 million and the NPV10 of the 3P reserves totalled $1.3 billion.
The comparative net attributable reserve positions are set out in the following table:
Howard Wilson, President and Chief Executive of Leed Petroleum PLC, commented, "Our focus during the first quarter of 2010 and remainder of the calendar year 2010 will be on allocating capital expenditures to lower risk drilling and remedial well work with the aim of significantly improving production and adding reserves. We have got off to a great start in 2010 with the successful drilling and testing of the Ship Shoal 201 A-6 well, which will more than double the Company's production output when brought on line in the second quarter of this year."
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