Purcell Makes Second Discovery of 2005
Purcell Energy announces proved and probable reserves additions of 2.2 million barrels of oil equivalent from successful drilling to date in 2005. Production has also increased to approximately 5,000 barrels of oil equivalent per day ("boe/d") as a result of tying in new wells in late March and during the second quarter of 2005. The bulk of reserves and production additions have come from natural gas discoveries at Tenaka in northeast British Columbia and a light oil discovery at Tatagwa in southeast Saskatchewan.
In April 2005, Purcell drilled a light oil discovery on its 100 percent interest Tatagwa property in southeast Saskatchewan. The first well was placed on production in late April and has averaged 270 bbls/d of oil. For the remainder of 2005, the Company has identified up to six additional locations, including development and exploratory targets. The locations have been identified using 3D seismic coverage combined with data from the two recently drilled wells. The next well is expected to spud in early June 2005.
Gilbert Laustsen Jung Associates Ltd. prepared the evaluation of the new reserves. Also, GLJ prepared a mechanical update to March 31, 2005 of the Company's December 31, 2004 reserves evaluation. The March 31, 2005 evaluations used GLJ's published April 2005 forecast of future commodity prices.
March 31, 2005 Reserves Highlights
- Total gross proved plus probable reserves evaluated using GLJ's forecast commodity prices are assessed at 15.6 million barrels of oil equivalent ("mmboe"), compared to 13.6 mmboe at December 31, 2004.
- Gross proved reserves evaluated using GLJ's forecast commodity prices are assessed at 9.4 mmboe.
- On a total proved plus probable basis, reserves additions totalled 2.2 mmboe and replace 115 percent of total forecast 2005 production of 5,300 boe/d.
- Based on forecast second quarter production of 4,900 boe/d, Purcell's reserves life index ("RLI") is 5.3 years on a proved basis and 8.7 years on a total proved plus probable basis.