Tri-Valley Corporation announced the company's year-end 2009 oil reserves determined in accordance with the new Federal regulatory oil and gas disclosure rules. Tri-Valley's total oil reserves at the end of 2009 were 9.8 million barrels compared to no reportable barrels of reserves at the end of 2008.
Tri-Valley's 2009 year-end oil reserves included 3.0 million barrels of proved reserves, 0.8 million barrels of probable reserves and 6.0 million barrels of possible reserves. Tri-Valley's ability to disclose improved oil reserves arises in part from new U.S. Securities and Exchange Commission (SEC) oil and gas disclosure rules effective January 1, 2010. The new SEC rules require a 12-month average oil price to be used to estimate future revenues, and, also permit the voluntary disclosure of probable and possible reserves.
At year-end 2008, the company had no reportable proved oil reserves as a consequence of the dramatic fall in world oil prices in the last two quarters of 2008 that negatively impacted the last sales price of the year used in the forecast of future revenues under the previous SEC disclosure rules.
The 2009 reserves disclosure also includes 6.8 million barrels of probable and possible reserves voluntarily reported by the company for the first time as now allowed under the new SEC rules. Most of the probable and possible reserves at year-end 2009 were related to Tri-Valley's interest in its Pleasant Valley heavy oil project at the Oxnard Oil Field in Ventura County, California, which is in the early stages of development by the company.
Tri-Valley's year-end 2009 reserves were estimated by independent reserves engineers in accordance with the new SEC oil and natural gas reserve disclosure rules. Under the rules, the company was required to use a 12-month arithmetic average of the sales price for the first day of each month to calculate future revenues. Tri-Valley's voluntary reporting of probable and possible reserves under the new rules is intended to provide investors with more information about the company's opportunities to potentially increase its proved reserves in the future. This view is shared by many in industry who provided supportive comments to the SEC during the public comment period on the new rules; and ultimately, the SEC agreed to allow voluntary reporting of probable and possible reserves when the final disclosure rules were published.
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