Niko Resources Downgrades Reserve Estimates for Block D6
|Monday, November 24, 2003
Niko Resources was advised by DeGolyer and MacNaughton (D&M) that D&M made an arithmetical error in the March 31, 2003 reserve report for the Company's interest in the D6 Block offshore India. A revised report effective March 31, 2003 was issued November 12, 2003 by D&M correcting the error. The revised report from D&M, assigns gross in place gas reserves of 8.6 trillion cubic feet (tcf) (as compared to 9.9 tcf as previously reported by D&M), including 2.5 tcf proved, 3.4 tcf probable and 2.6 tcf possible. Niko's unrisked 10% share of recoverable gas, all reserve categories (including possible), is 710 billion cubic feet (bcf) versus the previously announced 810 bcf. The 710 bcf represents an increase of approximately 270% from the gas in place reported at March 31, 2002. The D&M report does not include the results of the A2 well whose evaluation was in progress at the time of the report. In addition, D&M has used a smaller spacing unit in assigning reserves which resulted in the re-categorizing of a portion of the Probable (PVD) reserves from D&M's earlier report to Proved reserves. D&M have also determined that it is appropriate to use a higher recovery factor.
Reliance, the operator of D6, stated in their October 16, 2003 press release "The estimated reserve of natural gas in the deep-water block D6 in the Krishna Godavari basin off the Andhra Pradesh coast is approximately 14 tcf, equivalent to about 2.3 billion barrels or 300 million tones of crude oil. These discoveries are capable of producing in excess of 60 million standard cubic meters of gas per day."
Based on the revised report the Company's total proven gas reserves as at March 31, 2003 were 360.2 bcf versus 424.4 bcf as previously announced. Total proven and unrisked probable reserves as at March 31, 2003 were 686.2 bcf versus 707.3 bcf as previously announced a 258% increase from the previous year.