Universal Power announced prospective resource estimates for the Company's 90% owned 2713A Exploration Licence, representing approximately 16% of Universal's net land position in offshore Namibia. The property is located on the boundary between the Luderitz and the Orange Basin in the southern portion of Namibia. The prospective resource estimates were provided by a third party independent report (the "2713A Evaluation") supplied by DeGolyer and MacNaughton ("D&M") of Dallas, Texas. The D&M Prospective Resource Evaluation Report for Block 2713A, effective April 1, 2010, was prepared in accordance with National Instrument 51-101 ("NI 51-101"), Sections 5.9 and 5.10 standards for review and assessment of prospective resources. Overall, D&M has reported an unrisked mean oil-equivalent prospective resource at Block 2713A of 2.39 billion BOE (converting gas to oil at 6:1), and a risked mean prospective resource of 567 million BOE.
"The 2713A Evaluation provides an independent resource evaluation and is an important step forward in Universal's exploration program," said Mr. Gabriel Ollivier, CEO of Universal Power. "The calculated probability of success of 23% for the Block makes for robust risked economics and supports our belief that there is significant crude oil to be found in offshore Namibia. We feel that collectively the defined prospective resource of Block 2713A, related scientific findings and the large structural features already mapped will be of significant interest to the world's major oil and gas companies."
Of note, only a portion of Block 2713A has been mapped, leading to the identification of two oil prospects and two leads, all of which were reviewed by D&M for purposes of the resource report. The most significant prospect, Chimay, is a sub-salt equivalent play similar in age and geologic setting to the large Tupi and Jupiter discoveries made in the Santos Basin in offshore Brazil.
Summary of the Block 2713A
The Company's 90% owned subsidiary Kunene Energy (Proprietary) Limited holds the interest in the permit and the exploration concession, issued on August 30, 2007, by the Republic of Namibia, Ministry of Mines and Energy. The 2713A Block totals 5,481 square kilometers.
The 2713A Evaluation provides a discussion assessing the probability of geological success in undertaking a test well program on the 2713A prospect. The risk factors in assessing the probability are associated with source rock risk, migration risk, reservoir risk, closure risk, and containment risk, each of which are discussed in the 2713A Evaluation. A negative outcome from any one of, or a combination of, these risk factors has the potential for failure to discover economic concentrations of hydrocarbons.
3D Seismic Plan at Block 2713A
Universal is currently in the first exploration period which consists of four years of technical work. The Company plans on completing a 3D seismic program over the prospective areas that Universal currently has access to. The acquisition of seismic should be complete by March 31, 2011.
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