CALGARY, Feb. 28 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX)
announced today its total proved oil reserves ("1P") increased by 75 percent
to 10.5 million barrels during 2006 compared to estimates of six million
barrels at December 31, 2005. This was achieved after sales during 2006 of
2.2 million barrels, indicating a reserve replacement ratio for crude oil of
307 percent (proved or 1P only). On an equivalent basis, converting natural
gas to barrels of oil equivalent on a 6 Mcf/1 barrel basis, the reserve
replacement ratio increases to 385 percent after equivalent production of 2.3
million boes in 2006.
Readers are cautioned that the conversion used in calculating barrels of
oil equivalent (6 mcf:1 bbl) is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. Furthermore, boes may be misleading if used in
isolation. Also, estimations of reserves and future net revenue to be
discussed in this press release constitute forward-looking statements. See
"Forward Looking Statements" below.
The reserve estimates at year end 2006 were prepared by GLJ Petroleum
Consultants ("GLJ"), independent petroleum engineers of Calgary, Alberta.
Their report ("GLJ Report") was prepared using assumptions and methodology
guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook") and in accordance with National Instrument 51-101 ("NI51-101").
Prior reports for Petrolifera were prepared by DeGolyer and MacNaughton Canada
Limited ("D&M") and comparisons provided herein are to items contained in a
report ("D&M Report") with an effective date of December 31, 2005. The D&M
Report was also prepared in accordance with the COGE Handbook and NI51-101.
The GLJ Report estimates Petrolifera's total proved natural gas reserves
at December 31, 2006 to be 14.3 Bcf, an increase of 409 percent over year end
2005 estimates.
On a boe basis, Petrolifera's estimated total proved reserves (1P)
increased 99 percent to 12.9 million boe compared to 6.5 million boe last
year, again after production of 2.3 million boe during 2006.
The GLJ Report estimates Petrolifera's year end 2006 total proved and
probable ("2P") crude oil reserves to be 19.5 million barrels and 2P natural
gas reserves to be 28.8 Bcf. On an equivalent basis, total 2P reserves were
estimated to be 24.3 million boe, an increase of five percent over the D&M
estimate at year end 2005, after production of 2.3 million boe during 2006.
Using GLJ's December 31, 2006 escalated price and cost forecast, the GLJ
Report estimates that the 2P reserves will generate future pre-tax net revenue
of $630 million over the forecast life of the properties, after deduction of
related operating costs, royalties, forecast capital expenditures of $45.3
million and abandonment costs, but before deduction of indirect charges,
including corporate overhead. This net revenue stream is estimated to have a
10 percent present worth of $449 million.
More detailed summaries of the company's year end GLJ Report will be
contained in its 2006 Annual Report and 2006 Annual Information Form.
Petrolifera is preparing these documents, which will include customary year
end material, for distribution or filing near the end of March 2007.
Petrolifera is a public Canadian oil and natural gas exploration and
production company with activities in Argentina, Peru and with plans to
commence operations in Colombia. All of its reserves and production is located
in its 100 percent owned and operated Puesto Morales/Rinconada Concession in
the Neuquén basin, Argentina.
Forward Looking Statements
This press release contains forward-looking statements, including but not
limited to estimated reserves and future net revenues, and future capital
expenditures. These statements are 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 reserve estimates; 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, the uncertainty associated with negotiating with foreign
governments and risk associated with international activity. Additional risks
and uncertainties are described in the company's Annual Information Form which
is filed on SEDAR at www.sedar.com.
The reserves and future net revenue in this press release represent
estimates only. The reserves and future net revenue from the company's
properties have been independently evaluated by GLJ and D&M with effective
dates of December 31, 2006 and December 31, 2005, respectively. These
evaluations include a number of assumptions relating to factors such as
initial production rates, production decline rates, ultimate recovery of
reserves, timing and amount of capital expenditures, marketability of
production, future prices of crude oil and natural gas, operating costs,
abandonment and salvage values, royalties and other government levies that may
be imposed during the producing life of the reserves. These assumptions were
based on price forecasts in use at December 31, 2005 in the case of D&M and at
December 31, 2006 in the case of GLJ and many of these assumptions are subject
to change and are beyond the control of the company. Actual production, sales
and cash flows derived therefrom will vary from the evaluation and such
variations could be material. The present value of estimated future net cash
flows referred to herein should not be construed as the current market value
of estimated crude oil and natural gas reserves attributable to the company's
properties.
Due to the risks, uncertainties and assumptions inherent in
forward-looking statements, prospective investors in the company's securities
should not place undue reliance on these forward-looking statements. Forward
looking statements contained in this press release are made as of the date
hereof and are subject to change. The company assumes no obligation to revise
or update forward looking statements to reflect new circumstances, except as
required by law.
For further information: Richard A Gusella, Executive Chairman,
Petrolifera Petroleum Limited, Phone: (403) 538-6202, Fax: (403) 538-6225,
inquiries@petrolifera.ca, www.petrolifera.ca
