17th Mar 2008 07:02
Leed Petroleum PLC17 March 2008 Leed Petroleum PLC ("Leed" or the "Company") Reserve Update Leed Petroleum PLC, the oil and gas exploration and production company focusedon the Gulf of Mexico, today announces the results of its recently completedreserve audit. Reserve estimates Collarini Associates, an independent reserve auditor, ("Collarini") has auditedLeed's reserves, effective as of 1 April 2008. When compared, on a gasequivalent basis, against the audited reserve report prepared by Collarini atthe time of admission to AIM and effective as of 1 June 2007, the Company hasachieved the following reserve growth: • 1P* reserves: 43.1%; • 2P* reserves: 30.3%; and • 3P* reserves: 17.6%. The Company's reserve positions as of 1 June 2007 and 1 April 2008 are set outin the following table: 1 June 2007 1 April 2008Reserve Category Oil & Liquids Gas Oil & Liquids Gas (mmbbls) (bcf) bcfe (mmbls) (bcf) bcfe1P* Reserves 1.1 30.0 36.7 2.1 39.6 52.52P* Reserves 4.0 70.8 94.7 5.8 89.4 123.53P* Reserves 10.5 257.2 320.1 12.5 301.4 376.5 Source: Collarini The growth in Leed's reserves is attributable primarily to: • the successful drilling activity conducted at Eugene Island; • reserve additions arising from technical analysis with respect toobjectives that will be tested in the Eugene Island A-7 well, the next well thatLeed will drill; • reserves attributable to Ship Shoal block 201, which the Companyacquired at the last Minerals Management Service lease sale held in October2007; and • reserves in the Main Pass 64 field that the Company acquired fromChallenger Minerals Inc. on 11 March 2008. Furthermore, the Company believes that substantial exploration potential notaccounted for in the reserve numbers reported in this announcement exists on itsproperties. Reserve growth implications for the Company's credit facility Due to the substantial increase in 1P* reserves, the Company expects that theborrowing base on the US$80 million credit facility it has in place withBayerische Hypo-Und Vereinsbank AG ("HVB") will increase significantly from thepresent borrowing base cap of US$53.4 million. The Company expects that HVB willanalyse the results of the 1 April 2008 reserve report over the coming days, anda further announcement will be made in due course. The Company currently hasapproximately US$31 million drawn on the HVB facility. Howard Wilson, President and Chief Executive of Leed, commented: "We are very pleased with the substantial growth in reserves that Leed hasachieved over the last ten months. This demonstrates that we can deliver on theexpectations that we have set for ourselves. We have more drilling to do atEugene Island, and our next well, the Eugene Island A-7 well, has even morepromise than the very successful A-6 well that we have just drilled. TheCompany's future is bright." 17 March 2008 For further information: Leed Petroleum PLCHoward Wilson, President and Chief Executive +1 337 314 0700James Slatten, Chief Operating Officer +1 337 314 0700 Matrix Corporate Capital LLPAlastair Stratton +44 20 7925 3300Tim Graham +44 20 7925 7852 Pelham Public RelationsAlisdair Haythornthwaite +44 20 7743 6676Evgeniy Chuikov +44 20 3008 5506 NOTES TO EDITORS Review by a qualified person The information contained in this announcement has been reviewed and approved byChris Thompson, Manager of Business Development at the Company, BSC GradDip, whois a reservoir engineer (SPE) with over 15 years experience within the sector. Reserve Estimates Collarini Associates' reserve estimates stated in the announcement are made inaccordance with guidelines published by the Society of Petroleum Engineers andare based on its interpretation of the available data. Glossary bcf - billion standard cubic feet of gas bcfe - billion cubic feet of natural gas equivalent, where crude oil, condensateand natural gas liquids are converted to a gas equivalent using a ratio of sixthousand cubic feet of natural gas to one barrel of oil mmbls - million barrels of oil Reserve Definitions* 1P - Proved Reserves 2P - Proved and Probable Reserves 3P - Proved, Probable and Possible Reserves Proved Reserves are the estimated volumes of crude oil, condensate, natural gasand natural gas liquids which, based upon geologic and engineering data, arereasonably certain to be commercially recovered from known reservoirs underexisting economic and political/regulatory conditions and using conventional orexisting equipment and operating methods. When probabilistic methods are used,reasonable certainty means there is a 90% probability that the quantitiesproduced will exceed the estimate of proved reserves. Proved reserves arelimited to those quantities of hydrocarbons which have been evaluated either byactual production or by analytical tools and methods which demonstratereasonable certainty of future recovery. Probable Reserves are those reserves which geologic and engineering datademonstrate with a degree of certainty sufficient to indicate they are morelikely to be recovered than not. When probabilistic methods are used, there isat least a 50% probability that the quantities actually produced will exceed thesum of proved and probable reserves. Possible Reserves are those reserves which geologic and engineering datademonstrate are less certain than probable reserves and can be estimated with alow degree of certainty, insufficient to indicate whether they are more likelyto be recovered than not. When probabilistic methods are used, there should beat least a 10% probability that the quantities actually produced will exceed thesum of proved, probable and possible reserves. Operations Leed Petroleum PLC is an AIM quoted independent oil and gas exploration andproduction company. The Company's operations are concentrated in the Gulf ofMexico region where Leed has established a significant portfolio of producingand development assets. The Company has interests in 15 offshore fields and 1onshore field in the region. Leed's strategy is to grow the Company's portfolio through organic developmentof its existing assets and to utilise its regional expertise to identify andpurchase value adding assets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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