Calvalley Petroleum Inc., (TSX: CVI.A) provides 2013 reserves update

CALGARY, March 3, 2014 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" or the "Company") announces the results of its December 31, 2013 reserves evaluation.

The reserve evaluation was conducted by McDaniel & Associates Consultants Ltd. who prepared an independent engineering evaluation of the reserves attributable to the Company's 50% working interest in Block 9 in a report dated February 26, 2013 with an effective date of December 31, 2013 (the "McDaniel Report") in accordance with National Instrument 51 101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook").

Drilling activity in 2013 included the drilling of four new prospects, Ras Nowmah South, Ras Nowmah North, Sueda and Al Hedba plateau. Ras Nowmah South was completed and put on production during the year. The level of drilling activity was restricted by security and local issues during 2013.

The following information is derived from the McDaniel Report.

Company interest proved reserves of crude oil of 11.5 million barrels declined from 12.5 million barrels in 2012. Similarly company interest proved plus probable reserves of crude oil of 22.9 million barrels declined from 25.2 million barrels in 2012.

The following information is derived from the McDaniel Report:

Summary of Oil and Gas Reserves-Company Interest

    Light and Medium Oil   Heavy Oil   Total Crude Oil
Reserves Category   (Mbbl)   (Mbbl)   (Mbbl)
Proved(1)            
       Developed Producing   3,752   584   4,335
       Undeveloped   4,250   2,877   7,128
Total Proved   8,002   3,461   11,463
Probable(2)   9,463   1,998   11,461
Total Proved plus Probable   17,465   5,459   22,924
Possible(3)   6,897   1,391   8,288
Total   24,362   6,850   31,212
         

Notes:

(1) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
(2) "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(3) "Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a ten per cent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

Summary of Net Present Value of Future Net Revenue

  Before Future Income Tax Expenses Discounted at
(%/year)
Reserves Category 0 (M$US)   5 (M$US)   10 (M$US)   15 (M$US)
Proved              
       Developed Producing 98,011   84,814   74,849   67,117
        Undeveloped 195,207   143,443   108,850   84,949
Total Proved 293,218   228,257   183,699   152,066
Probable 356,116   226,677   152,915   108,424
Total Proved plus Probable 649,334   454,934   336,614   260,490
Possible 320,141   202,776   135,159   94,091
Total 969,474   657,710   471,773   354,581
               
  After Future Income Tax Expenses Discounted at
(%/year)
Reserves Category 0 (M$US)   5 (M$US)   10 (M$US)   15 (M$US)
Proved              
       Developed Producing 63,953   56,063   49,993   45,209
         Undeveloped 127,729   93,320   70,327   54,450
Total Proved 191,681   149,383   120,320   99,659
Probable 231,728   147,278   99,114   70,044
Total Proved plus Probable 423,409   296,661   219,434   169,703
Possible 208,092   131,363   87,132   60,624
Total 631,501   428,024   306,566   229,967
               

Notes:
(1) The McDaniel Report employed the following pricing assumptions for Brent Crude Oil as of January 1, 2014 in estimating the reserves data using forecast prices and costs:  2014 US$ 105.00;   2015 US$ 102.50;   2016 US$ 100.20;   2017 US$ 97.70; 2018 US$ 98.00;   2019 US$ 99.40 2020 US$ 101.30
(2) The weighted average realized sales price for Block 9 crude oil for the year ended December 31, 2013 was US$109.41 per barrel.

About Calvalley

Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates Block 9 of the Masila Basin, in The Republic of Yemen.

Forward Looking Information

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Statements relating to "reserves" are by their nature forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. The recovery and reserve estimates provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. As a consequence, actual results may differ materially from those anticipated in the forward looking information.

Forward-looking information involves significant risk and uncertainties. Although the forward-looking information contained herein is based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with the forward-looking information. Investors should not place undue reliance on forward-looking information.

The material assumptions and risk factors that could influence the forward looking information are contained in the Company's annual information form for the year ended December 31, 2012 dated March 26, 2013 and Management's Discussion and Analysis which are available under the Company's issuer profile on SEDAR at www.sedar.com and which are incorporated herein by reference.

The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.

SOURCE Calvalley Petroleum Inc.

For further information:

investorrelations@calvalleypetroleum.com or +1 (403) 297-0490
Edmund Shimoon, Chairman and CEO
Gerry Elms, CFO