CALGARY, Feb. 14, 2012 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" or
the "Company") provides the following operations update for
At least 1,000 workers employed by Yemen PetroMasila at Block 14 have
initiated a work stoppage which will impact production from all crude
oil producers in the Hadramout province including Calvalley at Block 9.
The Government of Yemen established PetroMasila in November to operate
Block 14 in the Masila area, Hadramout province to replace Nexen Inc.
Production operations at Block 9 will be shut down shortly when crude
oil storage tanks are full.
In December 2011 gross production from Block 9 averaged approximately
7,000 bopd and included production from the Hiswah, Ras Nowmah and Al
Roidhat fields. Production from the Al Roidhat field (which has the
capability of producing over 1,500 bopd) and the Ras Nowmah field have
been curtailed due to heightened security risks posed by locals in the
area - Ras Nowmah was producing 2,600 bopd when it was shut-in.
Production has been maintained at the Hiswah field (approximately 3,000
Recently, certain groups within the region have organized blockades on
major roads within the Masila basin including the trucking route from
Block 9 to Block 51 curtailing the movement of crude oil for export and
the movement of fuel and supplies. The Company anticipates production
from the Hiswah field will be curtailed within the next few days as a
result of both the local blockades and the work stoppage at the export
Calvalley management and staff are working closely with the government
of Yemen and local officials to resolve the concerns of locals in the
region of Block 9. The Company believes these concerns can be resolved
in a timely manner.
The current work stoppage at Block 14, which is impacting the operation
of the export pipeline and terminal and restricts the deliveries of
crude oil for export from Block 9, is being monitored closely to ensure
production from Block 9 will be reinstated in a timely manner.
Management is cautiously optimistic that the current political
environment in Yemen will improve after the February 21, 2012 election
and that operations will return to normal, however, the timing is
uncertain at this point.
The Company is planning to conserve its working capital (current fair
value estimate - US$82mm) and restrict capital project expenditures
until the operations in Block 9 can be resumed safely and effectively.
The Company is planning to release information in respect of its 2011
independent reserve evaluation shortly and is expecting to release its
2011 financial results by March 9, 2012. The information in these
releases will provide details of the Company's reserves of crude oil,
including original oil in place and reserve values, and information on
revenues, royalties, expenses, taxes, profitability and netbacks in
2011 of the Block 9 asset which indicate the benefits to both the
Government of Yemen and the Calvalley shareholder.
Calvalley is an international oil and gas company, with offices in
Calgary, Alberta, Canada, that operates its 50% working interest in
Block 9 of the Masila Basin, in The Republic of Yemen and its 100%
working interest in the Gimbi and Metema Blocks of the Blue Nile Basin,
in The Republic of Ethiopia.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release may contain forward-looking statements including,
without limitation, financial and business prospects and financial
outlooks, and such statements may be forward-looking statements which
reflect management's expectations regarding future plans and
intentions, growth, results of operations, performance and business
prospects and opportunities. Words such as "may", "will", "should",
"could", "anticipate", "believe", "expect", "intend", "plan",
"potential", "continue", and similar expressions have been used to
identify these forward-looking statements. These statements reflect
management's current beliefs and are based on information currently
available to management. Forward-looking statements involve significant
risk and uncertainties. A number of factors could cause actual results
to differ materially from the results discussed in the forward-looking
statements including, but not limited to, changes in general economic
and market conditions and other risk factors. Although the
forward-looking statements contained herein are based upon what
management believes to be reasonable assumptions, management cannot
assure that actual results will be consistent with these
forward-looking statements. Investors should not place undue reliance
on forward-looking statements.
Forward-looking statements and other information contained herein
concerning the oil and gas industry and Calvalley's general
expectations concerning this industry are based on estimates prepared
by management using data from publicly available industry sources as
well as from reserve reports, market research and industry analysis and
on assumptions based on data and knowledge of this industry which
Calvalley believes to be reasonable. However, this data is inherently
imprecise, although generally indicative of relative market positions,
market shares and performance characteristics. While Calvalley is not
aware of any misstatements regarding any industry data presented
herein, the industry involves risks and uncertainties and is subject to
change based on various factors.
SOURCE Calvalley Petroleum Inc.
For further information:
firstname.lastname@example.org or +1 (403) 297-0490
Edmund Shimoon, Chairman and CEO
Gerry Elms, CFO