Petro-Victory Energy Corp. Announces Results of Audit of Significant Additional Prospective Resources for the Lapacho Prospect

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CALGARY, Aug. 14, 2014 /CNW/ - Petro-Victory Energy Corp. ("Petro-Victory" or the "Company")(TSX-V:VRY)

Petro-Victory Energy Corp. ("Petro-Victory") is pleased to announce the results of an independent audit of its Prospective Resources over the "Lapacho" prospect, Pirity Block located in Paraguay, which was carried out by the international consultancy firm RPS Energy and dated July 28, 2014, with an effective date and preparation date of June 1, 2014.  This Audit Report was an update of the previous RPS Audit Report dated May 19, 2014, which audited two of three selected prospective areas in the Pirity Block.

The "Lapacho" prospect, which is located mostly in the Pirity Block, but does extend into the Demattei Block which is not held by the Company (the percentage of on-block volumes varies with the range of potential mapped closures), is estimated to contain mean Prospective Resources of 5.2 Tscf gas and 157 million barrels of condensate on a full-field (100% working interest) basis, of which 3.8 trillion standard cubic feet ("Tscf") (gas) and 114 million barrels (condensate) are within the Pirity Block. The mean unrisked Prospective Resources Net Attributable to Petro-Victory are 1.13 Tscf gas and 34 million barrels of condensate (the Net Attributable represents Petro-Victory's 36% working interest entitlement after deduction of government royalty and overriding royalty interest). RPS Energy estimates the Geologic Probability of Success ("GPoS", or chance of discovery) of the Lapacho prospect at 11.7%. (see Notes and Cautionary Statements) as follows:





Prospective Gas Resources Summary for Lapacho Prospect






Prospect -
License

Gross1


Net Attributable1


Primary
Gas (Bscf)

Low
Estimate

Best
Estimate

High
Estimate

Mean
Estimate


Low
Estimate

Best
Estimate

High
Estimate

Mean
Estimate

GPoS
%

Paleozoic
Reservoir


Pirity2

532

1118

2596

1356


442

928

2155

1126

11.7

Notes: 

1

Gross represents Petro-Victory's ultimate 36% WI after President's earning obligations have been met; Net is Petro-Victory's 36% WI entitlement after Government Royalty and ORRI

2

The Lapacho Paleozoic Prospect lies across the Pirity and Demattei licence boundary. As currently mapped, the Low Est. trap geometry is 86% Pirity14% Demattei, Best Est. is 73% Pirity 27% Demattei, High Est.72% Pirity 28% Demattei


Source: - RPS Energy audit of President's Volumetrics and Assumptions









Prospective Condensate Resources for Lapacho Prospect






Prospect -
License

Gross1


Net Attributable1


Condensate
(MMstb)

Low
Estimate

Best
Estimate

High
Estimate

Mean
Estimate


Low
Estimate

Best
Estimate

High
Estimate

Mean
Estimate

GPoS
%

Paleozoic
Reservoir


Pirity2

16

33

77

41


13

28

64

34

11.7

Notes:












1

Gross represents Petro-Victory's ultimate 36% WI after President's earning obligations have been met; Net is Petro-Victory's 36% WI entitlement after Government Royalty and ORRI

2

The Lapacho Paleozoic Prospect lies across the Pirity and Demattei licence boundary. As currently mapped, the Low Est. trap geometry is 86% Pirity14% Demattei, Best Est. is 73% Pirity 27% Demattei, High Est.72% Pirity 28% Demattei


Source: - RPS Energy audit of President's Volumetrics and Assumptions





Notes and Cautionary Statements:












1.

There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the Prospective Resources. Readers are cautioned that the volumes presented are estimates only and should not be construed as being exact quantities.












2.

Although the Company has identified Prospective Resources, there are numerous uncertainties inherent in estimating oil and gas resources, including many factors beyond the Company's control and no assurance can be given that the indicated level of resources or recovery of oil and gas will be realized. In general, estimates of recoverable oil and gas resources are based upon a number of factors and assumptions made as of the date on which the resource estimates were determined, such as geological and engineering estimates which have inherent uncertainties and the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results.












3.

All such estimates are, to some degree, uncertain and classifications of resources are only attempts to define the degree of uncertainty involved. For these reasons, estimates of the recoverable oil and gas and the classification of such resources based on risk of recovery, when prepared by different engineers or by the same engineers at different times, may vary substantially.












4.

Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. Consequently, estimates of resources should generally be quoted as a range according to the level of confidence associated with the estimates. An understanding of statistical concepts and terminology is essential to understanding the confidence associated with resources definitions and categories.












5.

The range of uncertainty of estimated recoverable volumes may be represented by either deterministic scenarios or by a probability distribution. Resources should be provided as low, best, and high estimates as follows:













a.

Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.













b.

Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.













c.

High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a ten percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.













This approach to describing uncertainty may be applied to reserves, contingent resources, and Prospective Resources. There may be significant risk that sub-commercial and undiscovered accumulations will not achieve commercial production. However, it is useful to consider and identify the range of potentially recoverable quantities independently of such risk.












6.

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have two risk components, the chance of discovery and the chance of development.












7.

GPoS is "Geologic Probability of Success" and is the risk factor associated with the chance of discovery. It is the probability that a prospect will be successful and contain recoverable volumes of hydrocarbons. This chance does not include chance of development. If a discovery is made, there is no assurance that the discovery will be suitable for commercial development. There are several factors which contribute to the RPS Energy estimate of GPoS, including the risk that an hydrocarbon trap may not be present, the risk that adequate reservoir properties may not exist, the risk that the reservoir trap will not have an effective seal, and the risk that a source of hydrocarbons and migration path (hydrocarbon source) to the reservoir may not be present.  In the Lapacho prospect, RPS Energy rates the reservoir and seal risks as the most important, with the trap and source risks being lower.







The Lower Devonian/Silurian Santa Rosa geological system (in which the "Lapacho" prospect is found) has the potential to be a significant gas-condensate system.

The Prospective Resources RPS Audit reports, which were initially carried out for the Operator, President Energy, and updated for Petro-Victory, seem to indicate the opportunity to open up a new hydrocarbon Province, with several other leads and prospects yet to be evaluated in the Pirity Block.

The largest single prospect in the Pirity Block looks now to be "Lapacho" which is fully described in the Audit Report Update of Prospective Resources carried out by the independent resource evaluator, RPS Energy and disclosed today.

Cautionary Statements Regarding Resources:

There are several significant positive factors relating to the Prospective Resource estimate, including that: (i) the geological features identified in the 2D and 3D seismic program indicate that the resources are on trend with existing offset production in Bolivia and Argentina, (ii) the results from the new seismic program identified new, prolific structures in the Paleozoic section that were not previously under consideration by President Energy or the Company, and (iii) the reservoirs are projected to have adequate permeability to flow initially without artificial lift, which should expedite evaluation for commerciality and future development. The significant negative factors relating to the Prospective Resource estimate include: (i) structural events are well defined seismically and are low risk, however, reservoir quality, seal, hydrocarbon migration and associated hydrocarbon column estimates are more at risk than the former, (ii) well costs are very high due to the exploratory nature of the initial group of wells, (iii) due to lack of any mid-stream infrastructure proximate to the prospects, oil and gas-condensate discoveries may be stranded for some time until mid-stream infrastructure is in place, which may take some time due to the remoteness of the prospects and costs associated with same, and (iv) the Pirity Block is located in Paraguay, and, as a result, the Company's operations may be adversely affected by changes in Paraguay's government policies and legislation (which in some instances may apply retrospectively) or social instability in Paraguay and other factors which are not within the control of the Company. Further, Paraguay is not currently a producer of oil or natural gas and it has neither oil and gas pipelines nor a railway system to transport oil and natural gas. In the event of an oil or gas-condensate discovery in the Pirity Block, Management believes that the transportation of any such oil or gas-condensate will initially be truck, using existing roads and highways, from the producing field to the final destination point or to an intermediate transfer point (whereby the oil or gas-condensate may be transferred to a barge for river transportation).

Although Petro-Victory has identified Prospective Resources, there are numerous uncertainties inherent in estimating oil and gas resources, including many factors beyond the Petro-Victory's control and no assurance can be given that the indicated level of resources or recovery of oil and gas will be realized. In general, estimates of recoverable oil and gas resources are based upon a number of factors and assumptions made as of the date on which the resource estimates were determined, such as geological and engineering estimates which have inherent uncertainties and the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results. All such estimates are, to some degree, uncertain and classifications of resources are only attempts to define the degree of uncertainty involved. For these reasons, estimates of the recoverable oil and gas and the classification of such resources based on risk of recovery, when prepared by different engineers or by the same engineers at different times, may vary substantially.

Cautionary Note

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.

Advisory Regarding Forward-Looking Statements

In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory, including management's assessment of Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.

Specifically, this press release contains forward-looking statements relating to but not limited to: our business strategies, plans and objectives, and drilling and exploration expectations. These forward-looking statements are based on certain key assumptions regarding, among other things: our ability to add production and reserves through our exploration activities; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect.

Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. These and additional risk factors are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities regulatory authorities at www.sedar.com.

The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

SOURCE Petro-Victory Energy Corp.

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For further information: Petro-Victory Energy Corp., Richard F. Gonzalez, CEO - 972-239-3084; Petro-Victory Energy Corp., Mark Bronson, CFO and Corporate Secretary - 817-838-4744; Brisco Capital Partners Corp., Scott Koyich, - 403-619-2200