Saxon Increases US Reserves
Saxon Oil's independent reserve auditors, LaRoche Petroleum Consultants, Ltd. of Dallas Texas, have completed the evaluation of the company's reserves in the United States as of December 31, 2008. This report does not include any value for the Kansas Gas Gathering sytems or international reserves for Saxon's interests in Italy (20% membership interest in AleAnna Resources LLC) and Spain (wholly owned subsidiary HDC).
LaRoche estimated the total net proved reserves of the company at forecast prices and costs to be 482,943 barrels of oil and 3,023,293 thousand cubic feet (Mcf) of gas plus associated plant products. This represents a 12.5% increase in oil reserves and a 36.7% increase in gas reserves year over year for the company. The future cash flow before income taxes increased by 7.5% to $30,700,353, with future cumulative cash flow discounted at 10% per year estimated to be $18,746,040, a 9% increase year over year.
These increases in reserves are especially noteworthy because year-over-year estimated crude price decreased from $80.99/barrel in 2007 to $62.73/barrel in this report (22.5% decrease), while estimated gas prices decreased from $7.13/Mcf to $6.90/Mcf (3.3% decrease). Estimated probable reserves (unrisked) also increased from 43,247 barrels to 69,702 barrels (38% increase year over year) while probable gas reserves increased from 274,117 Mcf to 459,411 Mcf (40%). Total proved plus probable future net cash flow was estimated to be $34,226,702 which discounted at 10% was estimated to be $20,074,376. All values were expressed in United States dollars.
The evaluation prepared by LaRoche was carried out in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook. Estimates of reserves were prepared using standard geological and engineering methods generally accepted by the petroleum industry. Because the reserves data are based on judgments regarding future events, actual results will vary and the variations may be material. Reserves data are the responsibility of the company's management. The responsibility of LaRoche was to express an opinion on the reserves data based on their estimates. Saxon will release detailed reserves data along with year-end financial data on SEDAR later this year.
Richard G. Green, president and CEO of Saxon, stated, "We are pleased that for the third consecutive year Saxon has substantially increased the oil and gas reserves of the company, which reflect the success of our business plan. As our gas gathering systems and associated resource play in Kansas mature and as we further develop our domestic properties, as well as our high impact Italian gas concessions and Spanish coal mines, we anticipate continued strong growth in net production, reserves, and cash flow, which, in turn, should increase shareholder value."
- Saxon to Participate in Tx. Gas Sand Development Project (Jan 18)
- Saxon Acquires 50% Interest in Eagle Ford Shale Play (May 05)
- Saxon Oil Commences Drilling on Kansas Well (Apr 22)