Petrolifera Petroleum Reports Increased Reserves and Pre-Tax Present Value for Year Ended December 31, 2007; Proved Crude Oil and Natural Gas Liquids Reserves Up 43 Percent After Record Production in 2007



    CALGARY, Feb. 25 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX)
announces today that the estimates of the company's 1P ("proved"), 2P ("proved
and probable") and 3P (proved, probable and possible) reserves, as prepared by
GLJ Petroleum Consultants of Calgary, Alberta ("GLJ") in a report with an
effective date of December 31, 2007 ("GLJ 2007 Report"), confirmed the
significant positive impact of 2007 drilling activity and the installation of
new production facilities, including a waterflood, at its Puesto Morales Norte
Field in the Neuquén Basin, Argentina.
    The GLJ Report and the estimates provided herein were 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 ("NI 51-101"). Comparisons provided herein with respect to
Petrolifera's reserves are to estimates contained in a report prepared by GLJ
with an effective date of December 31, 2006 ("GLJ 2006 Report"). The GLJ 2007
Report was prepared utilizing the GLJ January 1, 2008 price forecast,
effective December 31, 2007 and adjusted to Petrolifera's asset mix and
specific pricing circumstances in Argentina. In the GLJ 2007 Report, future
net revenue is calculated after deduction of forecast royalties, operating
expenses, capital expenditures and well abandonment costs but before corporate
overhead or other indirect costs, including interest and income taxes. The
present value of future net revenue ("present value") is calculated by GLJ
using various discount rates; this release will provide undiscounted future
net revenue and the 10 percent present value thereof.
    All references to barrels of oil equivalent ("boe") are calculated on the
basis of 6 mcf: 1 bbl. Readers are cautioned that the conversion used in
calculating barrels of oil equivalent 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. Future net revenues disclosed herein do not
represent fair market value. Also, estimations of reserves and future net
revenue to be discussed in this press release constitute forward-looking
information. See "Forward Looking Information" below.

    Reserve Volumes and Values

    The GLJ 2007 Report estimated that Petrolifera's 1P crude oil and natural
gas liquids ("NGL") reserves increased 43 percent to 15.1 million barrels as
at December 31, 2007, compared to 10.5 million barrels at December 31, 2006.
The increase reflects exploratory success and technical revisions primarily
arising from the company's capital spending and drilling program during the
year. The increase occurred after record production of 2.9 million barrels of
crude oil during the year. On a 1P basis, the company's reserve replacement
ratio for crude oil and NGL was 2.6 times. The reserve replacement ratio
percent was calculated by dividing the sum of production volumes for the year
and changes to estimated reserves volumes during the year by the production
volumes.
    Petrolifera's 1P natural gas reserves increased 14 percent to 16.3 Bcf
after the production of 0.8 Bcf and technical revisions, including provision
for flared natural gas volumes, with a reserve replacement ratio of 3.5 times,
calculated as indicated above.
    Despite the substantial movement of probable reserves to the 1P category,
Petrolifera's 2P crude oil and NGL reserves increased 10 percent to
21.5 million barrels, reflecting exploratory success. At December 31, 2007,
2P crude oil and NGL reserves were 21.5 million barrels compared to
19.5 million barrels last year. On a 2P basis, the company's reserve
replacement ratio for crude oil and NGL was 1.7 times, calculated as indicated
above.
    On an equivalent basis, Petrolifera's 1P reserves totaled 17.8 million
boe in 2007 compared to 12.9 million boe in 2006, for an increase of
38 percent. These reserves were forecast to generate $456 million of future
net revenue, with a 10 percent present value of $314 million, after deduction
of $18.6 million of future capital and $2.2 million of well abandonment costs.
The 10 percent present value for the 2007 1P estimates represents a 27 percent
increase over 2006. Reserve replacement for 1P on a boe basis was 2.6 times.
    On an equivalent basis, Petrolifera's 2P reserves total 25.6 million boe
in 2007 compared to 24.3 million boe in 2006 for an increase of five percent,
after production of 3.0 million boe. GLJ estimates these reserves will
generate $662 million of future net revenue, with a 10 percent present value
of $452 million after deduction of $34.4 million of future capital
expenditures and $2.8 million for future well abandonment costs. The
10 percent present value for the 2007 2P estimates represents only a one
percent increase over 2006, due primarily to changes in Argentinean pricing
and taxation policies during 2007. Reserve replacement for 2P on a boe basis
was 1.4 times. The company's calculated reserve life index, calculated by
dividing remaining 2P reserves at December 31, 2007 by 2007 total boe
production, was 8.5 years.
    Petrolifera also commissioned GLJ to provide an estimate of possible
reserves, which were last estimated effective December 31, 2005 by another
independent reserve evaluator. GLJ estimates the company's 3P crude oil and
NGL reserves to be 33.5 million barrels, with natural gas reserves estimated
at 33.5 Bcf and equivalent reserves estimated at 39.0 million boe. These
reserves are estimated to generate $1 billion of future net revenue with a
10 percent present value of $656 million, after deduction of $72.9 million of
future capital expenditures and $3.6 million for future well abandonment
costs.
    It should be noted that the estimate of Petrolifera's 3P reserves at
39.0 million boe is after the production of approximately 5.3 million boe in
2006 and 2007. This is the first updated estimate of possible reserves since
2005. The volume of possible reserves underscores the recognition of the
development potential for both crude oil and natural gas, of the lands
reviewed in the GLJ 2007 Report, which however did not include a review of the
company's undeveloped exploratory concessions at Vaca Mahuida, Puesto Guevara,
Puesto Morales Este and Gobernador Ayalla II, all in Argentina nor of
Petrolifera's holdings in Colombia and Peru.
    The following tables summarize the information contained in this press
release. Tables may not add due to rounding.

    
    Petrolifera Petroleum Limited
    Crude Oil, NGL and Natural Gas Reserves (1)(2)(3)(4)
    -------------------------------------------------------------------------
                   OIL & NGLs (mbbl)            NATURAL GAS (mmcf)
    Reserve
    Category       31-Dec-07  31-Dec-06         31-Dec-07  31-Dec-06
    -------------------------------------------------------------------------
                                           %                            %
                         GLJ        GLJ  change       GLJ        GLJ  change
    Proved (1P)       15,068     10,522    43      16,281     14,256    14
    Probable           6,452      9,012   (28)      7,992     14,544   (45)
    ------------------------------------          -------------------
    Proved plus
     Probable (2P)    21,520     19,534    10      24,273     28,800   (16)
    Possible          11,940        n/a   n/a       9,187        n/a   n/a
    ------------------------------------          -------------------
    Proved plus
     probable plus
     possible (3P)    33,460        n/a   n/a      33,460        n/a   n/a
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                   BOE's (mboe)
    Reserve
    Category       31-Dec-07  31-Dec-06
    ------------------------------------------------
                                           %
                         GLJ        GLJ  change
    Proved (1P)       17,782     12,898    38
    Probable           7,783     11,436   (32)
    ------------------------------------
    Proved plus
     Probable (2P)    25,566     24,334     5
    Possible          13,471        n/a   n/a
    ------------------------------------
    Proved plus
     probable plus
     possible (3P)    39,037        n/a   n/a
    ------------------------------------------------



    Petrolifera Petroleum Limited
    Before Tax Present Value of Future Net Revenue (1)(2)(3)(4)
    -------------------------------------------------------------------------
                             Before Tax Present Value at 31-Dec-07
    Reserve Category         Undiscounted                  Discounted at 10%
    -------------------------------------------------------------------------
                                     $000                               $000
    Proved (1P)                  $456,309                           $314,273
    Probable                      205,818                            137,780
                               ----------------------------------------------
    Proved plus Probable (2P)    $662,127                           $452,053
    Possible                      368,947                            203,641
                               ----------------------------------------------
    Proved plus probable
     plus possible (3P)        $1,031,074                           $655,694
    -------------------------------------------------------------------------

    Notes:
    1) Proved reserves are those reserves that can be estimated with a high
       degree of certainty to be recoverable. There is at least a 90%
       probability that the actual remaining quantities recovered will equal
       or exceed the estimated proved reserves.
    2) Probable reserves are those additional reserves that are less certain
       to be recovered than proved reserves. It is equally likely that the
       actual remaining quantities recovered will be greater or less than the
       sum of the estimated proved plus probable reserves.
    3) Possible reserves are those additional reserves that are less certain
       to be recovered than probable reserves. There is at least a 10%
       probability that the quantities actually recovered will be equal to or
       exceed the sum of proved plus probable plus possible reserves.
    4) Volumes, future net revenue and present value of future net revenue do
       not include undeveloped land values in Argentina, Colombia or Peru.
    

    Forward Looking Information

    This press release contains forward-looking information, including but
not limited to estimated reserves and future net revenues, and future capital
expenditures. The 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 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 with effective dates of
December 31, 2007 and December 31, 2006, respectively. This evaluation
includes 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 prepared by GLJ for use as at the dates of these reports and many of
these assumptions are subject to change and are beyond the control of the
company. Details of these assumptions will be contained in the company's
Annual Information Form for the year ended December 31, 2007. 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 information, prospective investors in the company's securities
should not place undue reliance on this forward-looking information. Forward
looking information 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:

For further information: Richard A Gusella, Executive Chairman,
Petrolifera Petroleum Limited, Phone: (403) 538-6201, Fax: (403) 538-6225,
inquiries@petrolifera.ca, www.petrolifera.ca

Organization Profile

PETROLIFERA PETROLEUM LIMITED

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890