TSX Venture Exchange Symbol: SNV
CALGARY, Feb. 23 /CNW/ - Sonoro Energy Ltd. ("Sonoro" or "the Company") (TSX-V:SNV) is pleased to announce the findings of an independent prospective oil resource evaluation report that summarizes expected resource volumes within its license area in Iraq. Sonoro is also providing an operational update for its asphalt exploration and crude oil processing project in Iraq.
Iraq - Independent Prospective Resource Evaluation Report
An independent evaluation of heavy oil potential for Sonoro's license area was prepared by RPS Energy Canada Ltd. ("RPS"), a Qualified Independent Reserves Auditor. This report highlights the probabilistic volumes of prospective oil resources and expected field size distribution within the Salah ad Din Province, in central Iraq, where Sonoro holds exclusive rights to explore for and develop asphalt resources (also referred to as heavy oil in this release). Sonoro holds a 70% working interest in this license, with Berkeley Petroleum Mesopotamia Asphalts Limited the remaining 30%. The license has a gross area of 24,363 km(2) or approximately 6 million acres. The license agreement is a revenue sharing agreement whereby Sonoro and Partner receive 50% net revenue with an 80% cost recovery provision before payout. Values below are cited as 100% gross working interest volumes and not on a revenue share basis in the absence of an economic evaluation.
The independent resource assessment was prepared in accordance with Canadian NI 51-101 definitions and the COGE Handbook. The effective date of the report is February 16, 2011. RPS' evaluation was limited to oil resources present down to a maximum depth of 2500m on the license, meaning only Tertiary and Cretaceous formations for which data were evaluated. There are five existing fields, two of which are producing, within the license area that are excluded from Sonoro's exclusive rights as they are deemed by the Iraqi Ministry of Oil to be discovered fields.
Highlights of the Prospective Resource Report
- Risked Prospective Resources in the Salah ad Din license area are
estimated on a gross recoverable oil basis to be approximately 5.2
billion barrels (P50), ranging between 1.7 billion barrels (P95) to
10.3 billion barrels (P5)
- The estimated Recoverable Oil Resources for a single field discovery
in the Province is 200 million barrels (P50), ranging between 10
million barrels (P90) and 4.2 billion barrels (P10), with an expected
(mean) field size of approximately 1.3 billion barrels oil
- The prospective heavy oil resources ((less than)25 degrees API) are
expected to be between 42% and 60% of the total prospective oil
resources in the Province
- Recovery factors using the Energy Intelligence data (see note 3,
below) indicate recovery factors in the range of 15% to 35% for all
discovered fields in the study area (16.8% to 25.6% for the heavy oil
There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.
Table 1: Prospective Risked Resources (Gross Technically Recoverable) in the Mesopotamian Cretaceous and Tertiary - Salah ad Din Province
Prospective Resources - Risked Recoverable Oil (MMbbl)
P95 P50 P5 Mean
Cretaceous 1,709 5,090 10,065 5,394
Tertiary 36 114 240 123
Total 1,745 5,204 10,305 5,517
Table 2: Expected Field Size Distribution (Technically Recoverable) in the Mesopotamian Cretaceous and Tertiary - Salah ad Din Province
Expected Field Size(2) - Technically Recoverable Oil (MMbbl)
Data Source(3) P90 P50 P10 Mean
Data Set 1 (WM) 4 150 5,081 2,346
Data Set 2 (IHS) 16 244 3,636 1,376
Data Set 3 (EIG) 11 206 3,958 1,567
Average Field Size 10 200 4,225 1,763
(1) 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 both an associated chance of discovery and
a chance of development. Prospective Resources are further subdivided
in accordance with the level of certainty associated with recoverable
estimates assuming their discovery and development and may be sub-
classified based on project maturity. The chance of commerciality is
the product of these two risk components.
(2) Expected Field Size is the range of typical field sizes for the
regional geologic setting. Field discoveries within the Salah ad Din
Province are expected to be within this range and the aggregate of
future potential field discoveries to be distributed in this manner.
(3) Sources: Data Set 1 - Wood Mackenzie Pathfinder E&P Database, Data
Set 2 - IHS EDIN E&P Database and Data Set 3 - Iraq Ministry of Oil
Reserves Estimates as published by the Energy Intelligence Group,
Operational Update - Salah ad Din Exploration Project
Drilling and Seismic
The license area includes exclusive asphalt exploration rights (below referred to as heavy oil) to the Salah ad Din Province in Central Iraq. The area of the license is 24,363 km(2) (approximately 6 million acres) and is situated within the Tigris River Valley, between the Western Desert and the foothills of the Zagros fold and thrust belt.
Sonoro has acquired in recent weeks initial well log and remote sensing data for Salah ad Din and surrounding areas. Sonoro has interpreted the data to generate a geologic model, with several heavy oil play concepts developed. The initial focus will be on the shallow Tertiary-age Jeribe and Euphrates limestones. Within the license area, these zones are contiguous reservoirs with heavy oil shows in a number of wells and oil seeps where exposed in outcrop.
Initially, the work plan was to drill shallow stratigraphic test holes for the purpose of establishing shallow stratigraphic control. Now, with additional geologic data, conceptual leads are being progressed to prospect category with definable drilling targets ranging from 400m to 800m drilling depth. The Company is evaluating and refining these initial drilling targets as well as working on the preliminary engineering of the drilling program.
The data Sonoro has acquired to date has allowed the Company to move beyond rank exploration. The license area is significant and Sonoro is satisfied that it has been able to focus exploration efforts on several specific heavy oil prospects.
The Company plans to disclose further details regarding its exploration program as plans are finalized for each of the drilling and seismic programs. The work program and budget will be reviewed with the Management Committee consisting of representatives of Sonoro and its partner, as required by the licence agreement.
The Company has had ongoing discussions with officials within the Province of Salah ad Din for a supply agreement whereby the Province will supply up to 5,000 barrels per day of crude oil feedstock for a topping facility. If Sonoro is able to successfully secure this supply agreement, the Company has identified an existing new modular topping facility that it could purchase and that could allow for processing to commence within 12 months from entering into the supply agreement. The Company anticipates debt financing of all or a significant portion of the processing facility's total cost. Construction and commencement of operations for this topping facility would provide cashflow to the Company and the Province, while benefitting the community through added jobs and community programs. The Company intends to utilize integrated development opportunities to secure off-take agreements so as not to rely solely on export infrastructure and markets.
President and CEO, Richard Wadsworth says, "We are pleased with the confirmation of the significant resource potential over our license in Iraq as outlined in the prospective resource report. Our initial geological assessments have provided targets for drilling and seismic. These exploration opportunities, together with our integrated plans for a topping facility, the recent financing put in place and our fully engaged and focused team on Iraq, Sonoro is in a strong position in 2011 to deliver significant value to our shareholders, our partners and the Province of Salah ad Din."
Forward Looking Information
This press release contains forward looking information, including but not limited to estimated resources, planned exploration at Sonoro's Salah ad Din Exploration Project, completion of a Supply Agreement and the future application of the Company's SonoAsh technology. The forward looking information is based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of resource estimates; the uncertainty associated with geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks associated with the implementation of new technology, risks associated with obtaining, maintaining and the timing of receipt of regulatory approvals, permits, and licenses, uncertainties relating to access to capital markets and the risk of volatile global economic conditions.
Statements relating to resources are deemed to be forward looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the resources described exist in the quantities predicted or estimated. The resources estimates of Sonoro's Salah ad Din Exploration Project described herein are estimates only. The actual resources at the Salah ad Din Exploration Project may be greater or less than those calculated.
Due to the risks, uncertainties and assumptions inherent in forward looking information, prospective investors in the company's securities should not place undue reliance on forward looking information. Forward looking information contained in this press release is made as of the date hereof and are subject to change. The company assumes no obligation to revise or update forward looking information to reflect new circumstances, except as required by law.
Sonoro is an international oil exploration and development company. Our current focus is heavy oil resource exploration and development in Iraq. We have initiated the evaluation of resource opportunities within our recently signed asphalt exploration license agreement in the Province of Salah ad Din. We are also advancing commercial applications of our proprietary industrial technologies worldwide.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Statements in this release that are forward-looking statements, including the exploration success and development plans in Iraq, are subject to risks and uncertainties, including those specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement except in compliance with applicable securities laws.
SOURCE Sonoro Energy Ltd.
For further information: RICHARD WADSWORTH, PRESIDENT & CEO, +1 403.262.3252, firstname.lastname@example.org, www.sonoroenergy.com