VANCOUVER, June 7 /CNW/ - Great Pacific International Inc. (GPI) (TSX.V: GPI) is pleased to announce that further to its news release disseminated on November 18, 2009, the Company's 100% owned subsidiary, GPI Oil and Gas Inc., has received an updated report from Chapman Petroleum Engineering Ltd. (Chapman) on the Contingent Resources in the Company's Manning Area Prospect of Alberta. GPI, through its subsidiary, owns 100% interest in leases on four sections (2,560 acres) of land in the Manning area of Northern Alberta that are the subject of this report. This news release has been updated to include the best estimate of contingent resources and statements required under NI 51-101, section 5.6.
The Chapman report was prepared using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National instrument NI 51-101, Sec 5.9, pertaining to disclosures of resources, utilizing forecast prices and costs. The purpose of this report was to independently determine the feasibility of the Company undertaking the exploration and development of the contingent resources and the estimated economic value.
In the report, the Heavy oil reservoirs of the Elkton Formation and the Lower Debolt were mapped. Both of these formations are in the heavy oil saturated Mississippian formation. The isopach mapping of these heavy oil reservoirs excluded transitional zones of appreciably less porosity in the lower parts of each unit so that only the highest quality heavy oil reservoir had been mapped. Well log analysis showed excellent reservoir parameters including good porosity and high resistivity of both zones.
Total heavy oil in place was determined on the Company lands for the two most significant potential carbonate reservoir zones in the area, the Elkton and Lower Debolt formations and amounted to over 200 million barrels of oil. This was based on volumetric calculations using the detailed net oil reservoir mapping of both zones. Planimetering these maps results in an average heavy oil reservoir thickness of 51 feet in the Elkton and 32 feet in the Lower Debolt. The Chapman Report lists the best estimate of contingent resources as 30,900,000 standard barrels of oil.
The oil gravity in these carbonate deposits is estimated at about 9 API, based on analogous pools in the general area. The Chapman report proposes exploitation through continuous steam injection. Estimated recoveries are based upon factors of 15, 10, and 25 percent for "best", low, and high respectively.
The contingencies associated with recovery of these resources are mobility of the heavy oil under the proposed scheme and the efficacy of the scheme. Secondarily, a commercially viable fuel source is essential for the implementation of this scheme.
The development plan used in the report was based upon a conceptual scheme of a five phase steam injection project. The first phase would be a $10.2 million pilot project intended to prove viability. The next four phases would be undertaken after results of the pilot project are known. The total estimated cost of development would be over $260 million. The report estimated positive net present values after discounting as below:
Project Net Value, Thousands of Dollars (CDN $K)
Best Low High Arithmetic Average
Estimate Estimate Estimate Average After Risk
$K $K $K $K $K
Undiscounted 1,432,432 807,015 2,694,377 1,644,608 468,000
5% per year 823,512 440,274 1,569,868 944,551 265,000
10% per year 487,283 242,018 953,656 560,986 153,000
15% per year 291,789 130,794 598,835 341,139 90,000
20% per year 178,620 66,588 385,817 210,308 52,000
It should not be assumed that the estimates of net present value presented in the table represent the fair market value of the Company's resources.
Given the inherent uncertainty of such a project, GPI is considering ways to proceed with the development of these properties while mitigating risk.
Additional information regarding the Company and its' business operations, including the Company's annual reports, press releases and filings, is available on the Company's SEDAR profile at www.sedar.com and its website at www.gpicanada.net. Information may also be obtained by contacting Mr. Thal S. Poonian, President and CEO, at 604-940-9190, toll-free at 1-877-942-8765, or by e-mail at email@example.com
About Chapman Petroleum Engineering Ltd.
Chapman Petroleum Engineering Ltd. (http://chapeng.ab.ca/index.html) founded in 1985, is a Canadian consulting firm providing comprehensive petroleum engineering, geological and geophysical and management services covering the full spectrum of the oil & gas industry, domestically and internationally. Chapman's services include reserve and economic evaluations and resource assessments, acquisition analyses, specialized technical studies, property exploitation and resource management, and representation for regulatory and legal purposes. The Key Professionals at Chapman each have from 25 to 40 years of broadly diversified experience in the oil & gas industry, domestically and internationally. They are Qualified Reserve Evaluators and Auditors under Canadian Securities Regulation Nl 51-101.
On behalf of the Board,
"Thal S. Poonian"
Thal S. Poonian President
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS AND RISKS
The reader is cautioned that assessed petroleum initially in place amounts are not "reserves" as defined by National Instrument 51-101, and there is no certainty that assessed oil in place is economically or technically recoverable.
Some of the statements in this press release are forward-looking statements and are based on current expectations, assumptions, and estimates. Words and phrases such as "believes", "expect, anticipate", are intended to identify forward-looking statements. Forward-looking statements carry certain risks regarding an assumed set of economic conditions and courses of action, including: (a) whether we will have sufficient financial resources to continue to meet our operational goals and future plans; and (b) the Report and its findings were not necessarily prepared in conformity with SEC disclosure principals or guidelines. There is a significant risk that actual material results will vary from projected results. No information provided in this press release should be construed as a representation or indication in any manner whatsoever of the present or future value of the Company or its common stock. Readers of information contained in this press release should carefully review the Company's filings with the Securities and Exchange Commission that contain important information regarding the Company's financial results, its future plans, and their limitations, and the risks involved with the Company's operations. The Company disclaims any responsibility to update forward-looking statements made herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.
SOURCE Great Pacific International Inc.
For further information: For further information: Mr. Thal S. Poonian, President and CEO, at (604) 940-9190, toll-free at 1-877-942-8765, or by e-mail at firstname.lastname@example.org