Petsec Energy Reports Higher Reserves at An Nagyah Oilfield in Yemen

Australia's Petsec Energy Ltd. (the Company) reported Tuesday that the Company’s ownership of oil reserves in the developed An Nagyah Oilfield in the Company’s Damis (Block S-1), Yemen, has been assessed by reserve auditors, DeGolyer and MacNaughton Canada Limited (DMCL) as of Jan. 1, 2016. Proved plus Probable (2P) reserves were estimated to be net 5.6 million barrels of oil, which holds a 2P net present value of future net revenue of $155.4 million, using an annualized discount rate of 10 percent (NPV10) and the forward oil price based on Brent current as at Jan. 1, 2016 and a production rate of no more than 5,600 barrels of oil per day.

DMCL has assessed total proved (1P) reserves to be 4.5 million barrels of oil net to the Company's economic interest and total proved plus probable (2P) reserves to be 5.6 million barrels of oil. The An Nagyah Oilfield is the only developed/producing oilfield of the five oil and gas discoveries (Osaylan, An Naeem, Wadi Bayhan, and Harmel fields), contained in the Damis (Block S-1) Production License, which was recently acquired by Petsec and announced to the ASX on Feb. 5, 2016.

The An Nagyah Oilfield has been shut-in since February 2014 due to political unrests in other parts of the country. At the time of the shut-in, the An Nagyah Oilfield was producing approximately 5,600 barrels of oil per day. The production facilities have been maintained in readiness for the restart of production once the current political unrest has been resolved and oil production in Yemen resumes.

An Nagyah oil reserves and NPV10 Valuations (net to Petsec Energy):

  • An Nagyah Reserves:
    • Proved (1P)
      • Net Reserves - Oil (million barrels): 4,540
      • NPV10 ($ million): 124.8
    • Probable
      • Net Reserves - Oil (million barrels): 1,108
      • NPV10 ($ million): 30.6
    • Proved plus Probable (2P)
      • Net Reserves - Oil (million barrels): 5,648
    • NPV10 ($ million): 155.4

Oil price used after quality and transportation adjustments to assess oil reserves and NPV10 (Recoverable Amount) valuations:

  • Year (Light/Medium Oil Price Forecast in $/barrel)
    • 2016 - 29.52
    • 2017 - 39.36
    • 2018 - 68.89
    • 2019 - 83.65
    • 2020 - 78.73
    • 2021 - plus 2 percent per year thereafter

It is the Company's intention to restart production from the An Nagyah Oilfield as early as is feasible, either by trucking or piping or a combination of both, even while conflict exists elsewhere in the country. It is anticipated that the cash flow from the An Nagyah Oilfield will provide the necessary capital to develop the additional fields in Damis (Block S-1) and the Al Meashar Oilfield in Block 7.

Damis (Block S-1), Yemen Reserves: Qualified Petroleum Reserves and Resources Evaluator

In accordance with ASX Listing Rule 5.42, the Damis (Block S-1) oil reserve estimates in this announcement are based on, and fairly represent, information and supporting documentation prepared by, or under the supervision of, qualified petroleum reserves and resources evaluator Ms. Nahla R. Boury, President of DeGoyler and MacNaughton Canada Limited and a Registered Professional Engineer in the Province of Alberta, Canada. Ms Boury has consented in writing to the form and context in which the reserve estimates are presented in this report.

The estimates of net reserves have been prepared in accordance with the Petroleum Resources Management System (PRMS) approved in March 2007 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists, and the Society of Petroleum Evaluation Engineers.

The net reserves have been estimated using a deterministic method and represent the portion attributable to the interests owned by the Company after deductions pursuant to the application of the terms of the Damis (Block S-1) Production Sharing Agreement. All oil volumes are reported on an "as sold" basis at the An Nagyah production facility as liquid hydrocarbons expressed in standard 42 gallon barrels. The net proved plus probable (2P) reserves are the summation of the net proved (1P) reserves and net probable reserves.

Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principles and techniques that are in accordance with practices generally recognized by the petroleum industry and in accordance with definitions consistent with those established by the PRMS. The method or combination of methods used in the analysis of each reservoir was tempered by experience by similar reservoirs, stage of development, quality and completeness of basic data, and production history.

The methodology for the determination of "Recoverable Amount" for the estimated reserves is consistent with that disclosed in the section on "Recoverable Amount" in the Company's 2014 Annual Report released to the market on April 10, 2015. This section covers reserves estimates, material assumptions and technical parameters.


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.