Trading Symbol: KEE:TSX-VEN
Shares Outstanding: 29,796,175
CALGARY, March 5 /CNW/ - Keeper Resources Inc. (KEE:TSX-VEN) is pleased
to announce the results of its year-end reserves report prepared by Fekete
Associates Inc., and an operational update.
- Proved and probable reserves increased 23% to 476 thousand barrels of
oil equivalent (BOE) (81% natural gas).
- Total proved reserves increased 20% to 334 thousand barrels of oil
equivalent (80% natural gas).
- Net present value of proved and probable reserves, at a 10% discount
rate before tax (forecast pricing) increased 6% to $8.9 million.
- Production averaged 170 barrels of oil equivalent per day (81%
natural gas) in 2006 and 190 barrels of oil equivalent per day for
the month of December 2006.
- Reserve life index (proven plus probable) is 7.7 years.
Keeper's average production for 2006 was 170 BOE per day for the year-end
December 31, 2006. Production was weighted 85% natural gas and natural gas
liquids with the balance being light oil. The company averaged 190 BOE per day
for the month of December 2006. At year-end the company had two cased
potential gas wells. Keeper has a 45% interest in one potential Viking gas
well that is awaiting testing, and completion. In the second cased potential
gas well, Keeper has a 60% interest which production tested 282 mcf/d. This
well is shut-in and awaiting higher gas prices to justify pipeline costs.
During 2006, Keeper increased total proved and probable reserves by 23%
to 476,000 BOE from 387,000 BOE at December 31, 2005, based on forecast prices
and costs. The composition of reserves at December 31, 2006 consists of 86%
natural gas and natural gas liquids and 14% light oil. At December 31, 2005,
reserves consisted of 83% natural gas and natural gas liquids and 17% light
At December 31, 2006, Keeper's total proved gross interest reserves were
334,300 BOE, an increase of 20% compared with 278,200 BOE at December 31,
2005. Keeper grew its proved and probable reserves, after production, by
approximately 89,000 BOE, replacing production by 144%.
Net Present Value and Future Net Revenue
The forecast prices used in the reserve report were Fekete's forecast
prices as of December 31, 2006.
The Company's statement of reserves data and other oil and gas
information as required under National Instrument 51-101, including the
presentation of oil and natural gas net interest reserves and future net
revenue after income taxes, were prepared using both forecast prices and costs
and constant prices and costs. The statement will be included in the company's
annual information form which will be filed on SEDAR.
Summary of Net Present Value of Future Net Revenue
Forecast Prices and Costs Before Income Taxes,
Discounted at Percent Per Year
(in thousands of dollars)
Reserves Category December 31, 2006
0% 5% 10% 15% 20%
Proved Producing $8,503.2 $7,331.7 $6,462.2 $5,795.3 $5,269.3
Proved $342.1 $306.7 $276.5 $250.9 $228.6
Total Proved $8,845.3 $7,638.4 $6,738.7 $6,046.2 $5,497.9
Probable $4,631.4 $3,033.0 $2,178.4 $1,667.5 $1,335.6
Total Proved $13,476.7 $10,671.4 $8,917.1 $7,713.7 $6,833.5
Although reserves increased by 23% year over year, the net present value
of Keeper's reserves (PV 10%) were up only 6% as a result of a reduction in
the natural gas price forecasts by Fekete. Below is a comparison of natural
gas prices, used by Fekete, for reserves as at December 31, 2005 and reserves
as at December 31, 2006.
AECO-C Spot (CDN $ / MMBTU)
Year Dec 31, 2005 Dec 31, 2006 % Difference
---- ------------ ------------ ------------
Evaluation Evaluation Year over Year
---------- ---------- --------------
1 $10.50 $7.35 (30.0%)
2 $9.50 $7.65 (19.5%)
3 $8.50 $7.80 (8.2%)
The value of the first year for the 2006 evaluation includes the effect
of a hedge at $7.60/GJ for 300 GJ/day that Keeper has in place for calendar
Keeper's reserve life index (RLI) is 7.7 years, based on forecast pricing
in 2006 for proved-plus-probable reserves. The RLI is calculated by dividing
year-end reserves by the annual production rate. The RLI represents a measure
of the amount of time to produce the remaining reserves at the annualized
production rate for the most recently completed period.
On April 5, 2006, the Company signed a production sharing contract with
Pogo Producing Company ("Pogo") and Vietnam Oil and Gas Corp. ("PetroVietnam")
for hydrocarbon exploration and production from Block 124, offshore Vietnam,
in the Phu Khanh basin. The exploratory phase of the contract is seven years,
with a firm work program during the first three years that includes the
acquisition of over 800 square kilometers of new three-dimensional seismic
data and the drilling of two exploratory wells. This is followed by two
operational two-year periods during which a well must be drilled during each
period in order to retain the licence acreage. PetroVietnam reserves the right
to participate in any declared commercial oil and gas discovery by taking up
to a 20% working interest. The Company concurrently entered into an assignment
agreement with Pogo under which the Company's 25% working interest was
acquired by Pogo in return for a 5% gross overriding royalty on 100% of any
production. This assignment is subject to the approval of the government of
Vietnam. Pogo Producing Company has completed the 3-D seismic program on
offshore Block 124 and the drilling program is anticipated to commence in
In 2005, the company signed a Memorandum of Understanding with
PetroVietnam Investment and Development Company (PIDC), a subsidiary of
PetroVietnam, to review the available data on the Coal Bed Methane (CBM)
potential in northern Vietnam. This data has been obtained and evaluated.
Keeper is now negotiating a Production Sharing Contract with PIDC.
The Company has three producing Nisku oil wells on the Meekwap property.
The newest well (30.84% before payout and 25.84% after payout) was drilled and
cased in early 2006 and re-entered in October 2006 to drill horizontal into
the Nisku zone. This well began producing in December 2006 at 20 bbls/day. An
acid stimulation is planned for this well in the 3rd quarter to improve
In February 2007, Keeper (100% interest before payout, 60% after payout)
drilled a Mannville test. This well has been cased as a potential gas well and
is awaiting completion.
About Keeper Resources Inc.
Keeper Resources Inc. is an oil and gas exploration company with
operations in Canada and Vietnam. Keeper's corporate philosophy is to develop
lower risk opportunities in Canada while at the same time participating in
higher risk, high impact international petroleum opportunities. This offers
stable revenue in Canada while exposing investors to potentially significant
increase in share value.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: Loren Komperdo, P. Geol, President, Telephone:
(403) 265-3365, Facsimile: (403) 265-2223, E-mail: firstname.lastname@example.org;
Paul Lipoth, Ardent Capital Inc., Telephone (403) 265-3365 ext. 233,
Facsimile: (403) 265-2223, Email: email@example.com