Bengal Energy Ltd. Announces Over 600% 3P Reserve Increase in Mid-year Reserve Update, Cuisinier Field, Australia

CALGARY, Oct. 5, 2012 /CNW/ - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") is pleased to announce a summary of the results of an independent report (the "GLJ Report") of the quantity of oil reserve volumes contained on Company lands within the boundaries of the Barta sub-Block, of Authority to Prospect ("ATP") 752 onshore Australia in the Cooper/Eromanga Basins in the State of Queensland. The GLJ Report, effective September 30, 2012, was conducted by GLJ Petroleum Consultants Ltd. ("GLJ") of Calgary, Alberta in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). GLJ is a qualified reserves evaluator in accordance with NI 51-101.

HIGHLIGHTS:

• Cuisinier Project 3P reserves increased over 600%: The GLJ report has assigned 7.5 million Proved plus Probable plus Possible ("3P") barrels of oil to the Company's interest in the Cuisinier property, a 614% increase from March 31, 2012.
  
  
• Proved reserves increased 900%:  Proved reserves increased to 0.7 million barrels, a 904% increase from March 31, 2012, while Proved plus Probable ("2P") reserves increased to 1.5 million barrels, a 269% increase.
  
  
• Increases reflect successful drilling program:  Since March, 2012 the Company has drilled four additional potential future oil producers, making the drilling program eight for eight and indicating a substantial expansion of the Cuisinier pool size. This completes the Cuisinier drilling program for the current fiscal year.
  
  
• Net present values increase significantly:  The before tax Net Present Values, discounted at 10%, of the Company's reserves as estimated in the GLJ Report amount to $164.6 million for the 3P reserves and $36.8 million for the 2P reserves, increases from March of 422% and 138%, respectively.

Reserves

Reserves and production information included herein is stated on a Gross Reserves Company interest basis (before royalty burdens and including royalty interests receivable) unless noted otherwise. The results of the Report are based on all available seismic and well information within the report area provided by Bengal to GLJ, as well as non-confidential data available from other operators in the basin. The GLJ Report used seismic and well data to define the areal extent and thickness of hydrocarbon accumulations in the Murta formations on Company lands.

The reserves data contained in the tables below is based upon the GLJ Report. The Company expects the next annual reserves update to occur as of the current fiscal year ending March 31, 2013; additional Cuisinier drilling is expected to take place thereafter.It should not be assumed that the estimates of future net revenues presented in the tables below and elsewhere in the press release represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Bengal's oil reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual oil reserves may be greater than or less than the estimates provided herein. 

Reserves Data (Forecast Prices and Costs)

SUMMARY OF OIL RESERVES AND NET PRESENT VALUES OF FUTURE NET REVENUE AS OF SEPTEMBER 30, 2012 FORECAST PRICES AND COSTS
CUISINIER PROPERTY - AUSTRALIA
					Light Oil					10% NVP
RESERVES CATEGORY					Gross (Mbbl)		Net (Mbbl)			Before Tax Present Value (M$)			After Tax Present Value (M$)
TOTAL
Proved Developed
		Producing			16		14			755			755
		Non-Producing			216		192			8,340			8,340
Proved Undeveloped					485		432			7,081			6,909
Total Proved					717		638			16,176			16,004
Probable					833		741			20,623			15,189
Total Proved Plus Probable					1,550		1,379			36,799			31,193
Possible					5,962		5,307			127,763			89,984
Total Proved Plus Probable Plus Possible					7,512		6,686			164,562			121,177

Notes:
(1)	Estimates of reserves include only light oil from the Cuisinier property in Australia at September 30, 2012. Refer to the Company's March 31, 2012 AIF filed on www.SEDAR.com for the Company's total reserves.
(2)	"Gross Reserves" are Corporation's working interest reserves (operating and non-operating) before the deduction of royalties.
(3)	"Net Reserves" are Corporation's working interest reserves (operating and non-operating) after deductions of royalty obligations.
(4)	"Proved reserves (1P)" are those reserves that can be estimated with a high degree of certainty to be recoverable; it is likely that the actual remaining quantities recovered will exceed the estimated Proved reserves; at least a 90% probability that the quantities actually recovered will equal or exceed the estimated Proved reserves is the targeted level of certainty. "Probable reserves (2P)" 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; at least a 50% probability that the quantities actually recovered will equal or exceed the sum of the estimated Proved plus Probable reserves is the targeted level of certainty. "Possible reserves (3P)" are those additional reserves that are less certain to be recovered than Probable reserves; there is a 10% probability that the quantities actually recovered will equal or exceed the sum of Proved plus Probable plus Possible reserves.
(5)	The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

SUMMARY OF NET PRESENT VALUES OF FUTURE NET REVENUE CUISINIER PROPERTY - AUSTRALIA AS OF SEPTEMBER 30, 2012 (FORECAST PRICES & COSTS)
			BEFORE INCOME TAXES DISCOUNTED AT (%/year)										UNIT VALUE BEFORE INCOME TAX DISCOUNTED AT 10%/year
RESERVES CATEGORY			0   (M$)		5 (M$)		10 (M$)		15 (M$)		20 (M$)		($/Bbl)
TOTAL
Proved Developed
	Producing		900		820		755		701		656		46.47
	Non-Producing		10,730		9,374		8,340		7,525		6,865		38.72
Proved Undeveloped			12,336		9,271		7,081		5,475		4,270		14.60
Total Proved			23,966		19,465		16,176		13,701		11,791		22.56
Probable			35,575		26,461		20,623		16,674		13,881		24.76
Total Proved Plus Probable			59,541		45,926		36,799		30,375		25,672		23.74
Possible			297,982		186,729		127,763		92,979		70,824		21.43
Total Proved Plus Probable Plus Possible			357,523		232,655		164,562		123,354		96,496		21.91

			AFTER INCOME TAXES DISCOUNTED AT (%/year)										UNIT VALUE AFTER INCOME TAX DISCOUNTED AT 10%/year
RESERVES CATEGORY			0   (M$)		5 (M$)		10 (M$)		15 (M$)		20 (M$)		($/Bbl)
TOTAL
Proved Developed
	Producing		900		820		755		701		656		46.47
	Non-Producing		10,730		9,374		8,340		7,525		6,865		38.72
Proved Undeveloped			11,866		8,991		6,909		5,367		4,201		14.23
Total Proved			23,496		19,185		16,004		13,593		11,722		22.32
Probable			24,905		18,983		15,159		12,609		10,768		18.24
Total Proved Plus Probable			48,401		38,168		31,163		26,202		22,490		20.13
Possible			208,549		131,018		90,014		65,816		50,444		15.10
Total Proved Plus Probable Plus Possible			256,950		169,186		121,177		92,018		72,934		16.13

Notes:
(1)	Net present value of future net revenue includes only light oil resource income from the Cuisinier property in Australia.
(2)	Income taxes includes all resource income, appropriate income tax calculations and prior tax pools.

About Bengal

Bengal Energy Ltd. is an international junior oil and gas exploration and production company based in Calgary, Alberta. The Company is committed to growing shareholder value through international exploration, production and acquisitions. Bengal trades on the TSX under the symbol BNG. Additional information is available at www.bengalenergy.ca.

Forward-Looking Statements

This news release contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, many of which are beyond Bengal's control. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward looking statements. The projections, estimates and beliefs contained in such forward looking statements are based on management's estimates, opinions, and assumptions at the time the statements were made, including assumptions relating to: the impact of general global economic conditions in Canada, Australia, India and in the United States, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified operating or management personnel, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and fluctuations in market valuations of companies with respect to announced transactions and the final valuations thereof, and the ability to obtain required approvals from regulatory authorities. We believe the expectations reflected in those forward-looking statements are reasonable but, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bengal will derive from them. Forward-looking statements include expectations related to the accuracy of reserves estimates; the timing of the next reserves update and the timing of the additional Cuisinier drilling. The forward looking statements contained herein are subject to numerous known and unknown risks and uncertainties that may cause Bengal's actual financial results, performance or achievement in future periods to differ materially from those expressed in, or implied by, these forward-looking statements, including but not limited to those material risks discussed in Bengal's Annual Information Form under the heading "Risk Factors" and in Bengal's annual MD&A under the heading "Risk Factors". The forward-looking statements contained in this news release speak only as of the date hereof and Bengal does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be require pursuant to applicable securities laws.

 

SOURCE: Bengal Energy Ltd.

Bengal Energy Ltd.
Chayan Chakrabarty, President and CEO
Bryan Goudie, CFO
[phone]
Email: [email protected]
Website: www.bengalenergy.ca