Resaca Updates Reserves for Permian Basin O&G Properties
Resaca, the oil and natural gas production, exploitation, and development company focused on the Permian Basin in the USA, announced an updated reserve study as of January 1, 2009 for the Company's oil and gas properties.
As of January 1, 2009, Resaca's proved and probable ("2P") reserves were 28.4 million barrels ("MMbbls") of oil and 19.1 billion cubic feet ("Bcf") of natural gas for a total of 31.6 million barrels of oil equivalent ("MMboe"). The Company's proved reserves represented 55% of the 2P reserves. Additionally, Resaca's possible reserves were 5.5 MMbbls of oil and 4.2 Bcf of natural gas as of January 1, 2009 for total proved, probable and possible ("3P") reserves of 33.9 MMbbls of oil and 23.3 Bcf of natural gas (37.8 MMboe). All reserves are calculated on a net revenue interest basis (working interest volumes less royalties).
This semi-annual reserve study was prepared by the Company's internal reservoir engineers. At July 1, 2008, the Company commissioned Haas Petroleum Engineering Services, Inc. ("Haas") to prepare its year end reserve report for its primary and secondary recovery (water injection) reserves and Williamson Petroleum Consultants, Inc. ("Williamson") to prepare a year end reserve report considering only those additional reserves which could be recovered through tertiary recovery (CO2 injection). Together, these reports provided a complete analysis of Resaca's reserves as of July 1, 2008. In preparing the January 1, 2009 reserve study, the Company's internal reservoir engineers performed a mechanical "roll forward" of the Haas and Williamson studies, adjusting for activity conducted during the period from July 1, 2008 to December 31, 2008.
In estimating its oil and gas reserves, the Company follows the oil and gas reporting disclosure rules adopted by the U.S. Securities and Exchange Commission ("SEC") on December 29, 2008, which, when effective, will require companies to use the average price during the twelve month period prior to the ending date covered by the report. This average price shall be determined as an un-weighted arithmetic average of the first-day-of-the-month price for each month within such twelve month period. The oil prices used in the Company's reserve report are based on the un-weighted arithmetic average of the price for NYMEX West Texas Intermediate ("WTI") oil on the first day of the month in each of the twelve months prior to January 1, 2009. This figure was calculated to be $101.65 per barrel and is further adjusted by field for quality, transportation fees, and regional price differentials. The gas prices are based on the un-weighted arithmetic average of the price for NYMEX Henry Hub natural gas on the first day of the month in each of the twelve months prior to January 1, 2009. This figure was calculated to be $9.04 per MMbtu and is also adjusted by field for transportation fees and regional price differentials.
The estimates of reserves and future revenue were prepared in accordance with the definitions and guidelines set forth in the March 2007 Petroleum Resources Management System as sponsored and prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers.