Become a Member

Track your favourite stocks
Create & monitor portfolios
Daily portfolio value

Company	Chg	Chg %
Quickpicks
£	%
Add shares to your quickpicks to display them here!

Operations Update - Syria, Block 26

30th Apr 2009 07:00

RNS Number : 4235R

Emerald Energy PLC

30 April 2009

Emerald Energy Plc

30 April 2009

Operations Update - Syria, Block 26

Emerald Energy Plc ("Emerald" or the "Company") is pleased to provide the following update on the evaluation of reserves in fields held under the contract for exploration, development and production of petroleum in Block 26, Syria (the "Contract").

Khurbet East Field

An independent estimate of the petroleum reserves of the Khurbet East field at 31 December 2008 has been completed by RPS Energy Ltd ("RPS"), part of RPS Group Plc, based on data acquired up to 14 April 2009 which includes the data acquired in the Khurbet East No.8 well but not from the successful flow test after the acid stimulation operation.

The gross Proved plus Probable Reserves of oil contained in the Massive reservoir and recoverable within the period of the Contract are estimated to be 59.2 million barrels as at 31 December 2008 and to be 63.4 million barrels for the life of field. It is anticipated that optimisation of the field development may result in the 4.2 million barrels estimated by RPS to be produced outside the period of the Contract, also being produced within the term of the Contract.

A summary of the oil reserves as at 31 December 2008 is given in the table below.

Oil Reserves

(million barrels)

Proved

Proved plus Probable

Proved plus Probable plus Possible

Gross

34.2

59.2

99.7

Working Interest

17.1

29.6

49.9

Under the new estimate of petroleum reserves, the gross Proved plus Probable recovery of oil within the period of the Contract, taking into account the 1.4 million barrels produced before 31 December 2008, has increased by 3.3% since the last evaluation as at 31 December 2007.

Yousefieh Field

An independent estimate of the petroleum reserves of the Yousefieh field at 31 December 2008 has been completed by Fugro Robertson Limited ("FRL"), based on data made available up to 31 March 2009.

The gross Proved plus Probable Reserves of oil produced within the period of the Contract are estimated to be 11.3 million barrels as at 31 December 2008.

A summary of the oil reserves as at 31 December 2008 is given in the table below.

Oil Reserves

(million barrels)

Proved

Proved plus Probable

Proved plus Probable plus Possible

Gross

1.2

11.3

16.7

Working Interest

0.6

5.7

8.4

Further to these oil reserves and the associated oil initially in place, FRL estimated there to be an additional area towards the east of the field, including the Yousefieh No.2 well location, with a best estimate of gross Contingent Resource of oil initially in place within this area of 42 million barrels. FRL did not estimate an associated recoverable resource and further work is required to determine whether this volume is commercial and, if so, an appropriate recovery factor.

Block 26 Net Entitlement Reserves

Under the terms of the Contract, there is a single cost recovery pool for all the fields within the Contract. The Operator has estimated the net entitlement Reserves attributable to the Company based on the estimates of gross Reserves provided by RPS and FRL, the terms of the Contract, and the Operator's estimates of future oil price, development costs, and operating costs. Key assumptions include a Brent crude price of $45 per barrel in 2009 rising to $70 per barrel after 2012. It is assumed that the oil sold from Block 26 trades at an average $11 per barrel discount to Brent.

The Operator estimates that the total net entitlement Reserves of oil attributable to the Company at 31 December 2008 from fields in Block 26 is 8.1 million barrels on a Proved basis,14.3 million barrels on a Proved plus Probable basis and 21.9 million barrels on a Proved plus Probable plus Possible basis.

Net entitlement Proved plus Probable Reserves of oil attributable to the Company at 31 December 2008 in Block 26 has increased by 3.4 million barrel (31%) compared to the 10.9 million barrels reported in the annual report for the year ended 31 December 2008.

Emerald's Chief Executive Officer, Angus MacAskill, said:

"We are very pleased with the material increase in reserves in Block 26 with the excellent production performance leading to improved recovery in the Khurbet East field and the addition of new reserves from the Yousefieh discovery. We are encouraged that full field development of the Khurbet East field, appraisal of Yousefieh, and exploration generated by the 3D seismic survey currently being acquired will lead to further opportunities for advancement."

Enquiries: Lisa Hibberd 020 7925 2440

1. Reserves quoted on a working interest basis are provided by the Company and are not contained in the reports by RPS and FRL. Reserves on a working interest basis are the gross oil reserves of the field multiplied by the Company’s working interest in the Contractor group (50%).

2. The standard used in preparing the reserve estimates was the resource definitions jointly set out by the Society of Petroleum Engineers (SPE), the World Petroleum Congress (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE) in April 2007 in a document entitled “Petroleum Resources Management System” (PRMS).

3. Net entitlement oil reserves are the reserves that the Company is estimated to be entitled to recover under the terms of the Contract, after the application of royalties and other terms of the Contract including the apportionment of Cost Recovery Crude Oil and Production Sharing Crude Oil as determined under certain oil and gas pricing assumptions.

4. Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions.

5. Proved Reserves are those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.

6. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate.

7. Possible Reserves are those reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves

8. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for the commercial development due to one or more contingencies.

9. Full reserve category definitions and guidelines are documented in the PRMS on the SPE website at http://www.spe.org/spe-app/spe/industry/reserves/prms.htm

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCSESFAUSUSEDL

Related Shares:

FTSE 100 Latest

Value8,496.80

Change1.95