Trading Symbol: KEE:TSX-VEN
Shares Outstanding: 32,298,075
CALGARY, March 20 /CNW/ - Keeper Resources Inc. (KEE:TSX-VEN) wishes to
announce the results of its 2007 year-end reserves evaluation (effective
December 31, 2007) prepared by Fekete Associates Inc., and provide an
The Company's focus is in Vietnam where it has a 5% gross overriding
royalty on an offshore production sharing contract (Block 124), and
anticipates signing an onshore coal bed methane production sharing contract as
discussed below. The 2007 year-end Fekete reserve report deals solely with the
Company's Canadian oil and gas properties.
- Proved and probable reserves decreased 47% to 254 thousand barrels of
oil equivalent (BOE) (74% natural gas).
- Total proved reserves decreased 49% to 170 thousand barrels of oil
equivalent (72% natural gas).
- Net present value of proved and probable reserves, at a 10% discount
rate before tax (forecast pricing) decreased 51% to $4.3 million.
- Sales volume averaged 147 barrels of oil equivalent per day
(82% natural gas) in 2007.
Keeper's average sales volume for 2007 was 147 BOE per day for the year
ended December 31, 2007. Production was 87% natural gas and natural gas
liquids with the balance being light oil. The Company sales volume averaged
77 BOE per day for the month of December 2007 and 94 BOE per day for the month
of January 2008.
Fekete's 2008 production forecast for proven reserves is 82 BOE per day
and for proven plus probable reserves is 84 BOE per day. At year-end the
Company had two cased potential oil wells and two cased potential gas wells.
There were no reserves assigned to these wells in the Fekete report.
During 2007, total proved and probable reserves decreased by 47% to
253,900 BOE from 476,100 BOE at December 31, 2006, based on forecast prices
and costs. The composition of reserves at December 31, 2007 consists of 79%
natural gas and natural gas liquids and 21% light oil. At December 31, 2006,
reserves were 86% natural gas and natural gas liquids and 14% light oil.
At December 31, 2007, Keeper's total proved gross interest reserves were
169,900 BOE, a decrease of 49% compared with 334,300 BOE at December 31, 2006.
Net Present Value and Future Net Revenue
The Company's presentation of oil and natural gas net interest reserves
and future net revenue before income taxes, were prepared using forecast
prices and costs. It should not be assumed that the undiscounted or discounted
net present value of future net revenue attributable to reserves estimated by
Fekete represent the fair market value of those reserves.
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, 2007
0% 5% 10% 15% 20%
Proved Producing $4,758.6 $3815.2 $3,225.0 $2820.9 $2,525.8
Proved Non-Producing $104.3 $93.4 $81.5 $70.6 $60.9
Total Proved $4,862.9 $3,908.6 $3,306.5 $2,891.5 $2,586.7
Probable $2,577.8 $1,511.4 $1,021.2 $753.5 $589.0
plus Probable $7,440.7 $5,420.0 $4,327.7 $3,645.0 $3,175.7
The forecast prices used in the reserve report were Fekete's forecast
prices as of December 31, 2007.
The reserves decreased by 47% year over year and the net present value of
Keeper's reserves (PV 10%) were down by 51%. This is partially due to 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, 2006
and reserves as at December 31, 2007.
AECO-C Spot (CDN $ / MMBTU)
Year Dec 31, 2006 Dec 31, 2007 % Difference
---- ------------ ------------ ------------
Evaluation Evaluation Year over Year
---------- ---------- --------------
1 $7.35 $6.70 (8.8%)
2 $7.65 $7.50 (2.0%)
3 $7.80 $7.75 (0.6%)
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 had in place for calendar
Fekete's oil prices forecast for Edmonton Light Oil are $88.35 per barrel
for 2008, $85.75 per barrel for 2009, and $83.10 per barrel for 2010.
The Company anticipates an estimated $3.4 million ceiling write-down at
the end of 2007 as a result of the negative reserve revisions, primarily on
the Bittern Lake property.
Keeper's reserve life index (RLI) is 8.8 years, based on forecast pricing
in 2007 for proved-plus-probable reserves. The RLI is calculated by dividing
year-end reserves by the current (2008) 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 (now Plains Exploration & Production Company
("Plains")) 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 850
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
license acreage. Plains will serve as operator of the block. PetroVietnam
reserves the right to participate in any declared commercial oil and gas
discovery by taking up to a 20% working interest. Concurrent with the signing
the Company entered into an assignment agreement with Plains under which the
Company's 25% working interest was acquired by Plains in return for a 5% gross
overriding royalty ("GOR") on 100% of the production. This assignment was
approved by the government of Vietnam in May 2007 and the Company's interest
in Block 124 is now a 5% GOR. The 3-D seismic program on offshore Block 124
has been completed.
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 has completed negotiations of a Production Sharing Contract with
PetroVietnam and PetroVietnam Exploration Production Corporation (the
successor company to PIDC) subject to final approval by PetroVietnam and the
Government of Vietnam. With approval from PetroVietnam management and the
Government of Vietnam, awarding of the Production Sharing Contract and
associated Investment License is anticipated to occur in the second quarter of
The Company has three producing Nisku oil wells on the Meekwap property.
The newest well (30.84% before payout and 25.84% after payout) produced at a
rate of approximately 15 bbl/d of light oil during 2007. This well was
stimulated with an acid squeeze in late 2007. A stabilized flow rate has not
yet been achieved due to pipeline and battery problems. An analysis of the
production test and fluid level indicates that the well may be capable of
producing in the 40 bbl/d to 60 bbl/d range.
Keeper drilled and completed a development well in the Niton area in
December 2007. Swab testing indicates a potential oil well. Required permits
are expected to be obtained in the second quarter in order to set up a
temporary single well battery to determine a stabilized production rate and
any requirement for gas conservation. Keeper has a 44.7% interest until 300%
of the completion costs are recovered, reverting to a 30% interest until 300%
of the drilling costs are recovered, then reverting to 3% working interest
Keeper has a 100% working interest in a section of land in the Gordondale
area where we re-entered a suspended well in December 2007 to recomplete a
zone for light oil. The well swabbed back oil and will be set up for
production testing in the second quarter of 2008 to determine a stabilized
Keeper has a 60% interest in a Bittern lake well which production tested
282 mcf/d from the Belly River. This well is shut-in and awaiting higher gas
prices to justify pipeline costs.
The Company has a 100% (60% after payout) working interest in a potential
gas well in the Spirit River area. The plan is to complete this well in the
second quarter of 2008.
Keeper has entered into a physical hedge for 300 GJ of natural gas per
day at $7.00 per GJ. The contract runs from February 1st to December 31st,
This press release includes statements identified by the use of the
references "expects" or "plans" or "anticipates" or similar words about
expected future events and/or results that are forward-looking in nature and
subject to substantial risks, assumptions and uncertainties that may cause the
actual results, performance or achievements expressed or implied by such
forward-looking statements to differ materially. These risks, assumptions and
uncertainties include but are not limited to petroleum and natural gas price
volatility, regulatory government and third party decisions and approvals, the
status of negotiations and willingness of other parties to complete these
negotiations, availability of labour, services and supplies, market
competition, the timing of expenditures, production levels and the adequacy of
funding for capital investments. Keeper Resources Inc. cautions that actual
performance will be affected by a number of factors, including those
referenced above, many of which are beyond its control.
Petroleum and natural gas reserves and volumes are converted to a common
unit of measure on a basis of six thousand cubic feet (mcf) of gas to one
barrel (bbl). A BOE conversion rate of 6 mcf: 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value of equivalency at the wellhead.
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