DGAP-News: Activa Resources AG raises reserve estimates significantly
(firmenpresse) - Activa Resources AG / Miscellaneous
23.02.2010 07:42
Dissemination of a Corporate News, transmitted by
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Activa Resources AG raises reserve estimates significantly
- 55 % increase in 2P oil and natural gas reserves to 6.4 million BOE
- 100 % increase in asset values (PV10) of 2P reserves to USD 144 million
- Primarily attributable to completion of OSR- Halliday field study, where
2P reserves rise 103 %
- Management evaluating strategic alternatives for financing the
development of its core assets
Bad Homburg, 23rd February 2010. The Management Board herewith announces a
material increase in Activa's oil and natural gas reserves following the
completion of its previously announced field study and the evaluation of
its initial drilling program on its main oil producing asset, the
OSR-Halliday unit in East Texas.
Activa Resources total 2P reserves have risen by 55 % y-o-y to 6.4 million
BOE at 1 January 2010 with an 80:20 oil to natural gas mix (vs. reserve
estimate at 1 January 2009). Estimated Future Net Revenue (FNR) from the 2P
reserves has increased to USD 360 million (USD 138.7 million) with a PV10
of USD 144.5 million (USD 74.1 million). The PV10 values have doubled y-o-y
due to the higher reserve estimates and better pricing. 1P (proven)
reserves amount to 2.6 million BOE. As in the past, the reserve estimates
have been provided by Sojen Consulting, LLC, independent third party
engineers based in Austin, Texas.
The increase in Activa's reserve base is primarily attributable to Activa's
work on the OSR-Halliday field, an established oil field covering over
12,000 acres in east Texas with a production history going back to 1961.
Since acquiring an approx. 32 % working interest in the field in 2007,
Activa has conducted a detailed appraisal of the field's potential. This
included new reservoir modelling by Cobb&Associates of Dallas, an
industry leader in petroleum engineering and formation evaluation work, as
well as the support of other third party reservoir experts and Activa's
technical team.
The field study report combined with the results of Activa's successful
vertical well (No. 8-2) in the northern part of the field in the summer of
2008 - the first well to be drilled on the acreage in decades - has
effectively defined the potential of the main oil producing 'Woodbine'
formation. This formation is a prolific producer across the region.
Importantly, the new well supported Activa's pre-acquisition assumption
that the field holds substantial remaining recoverable reserves and can be
successfully infill drilled. The well encountered virgin pressures in the
main pay (Woodbine) and was put on production in late 2008.
The main results of the field modelling and reservoir study are:
- Original Oil in Place (OOIP) estimated at 148 million barrels of oil (BO)
- Production to date (since 1961) of approx. 13.5 million BO
- Recovery rate of approx. 8.5 % on average
- Primary productive efficiency is estimated at 20 % of OOIP which equates
to an additional 14.6 million barrels that can be economically produced on
primary recovery
- Additional 14 - 28 million barrels via secondary and tertiary recovery
methods would take the recovery rate to over 45 % of OOIP.
Particularly significant is the potential attributable to drilling new
wells with horizontal laterals in the field. Significant developments in
horizontal drilling and multi-stage fracturing technology have already
resulted in higher IP's and EUR's in the Woodbine formation in fields near
the OSR-Halliday field. The initial results of over 20 wells have seen IP's
and projected ultimate recoveries with up to 10-fold increases over
vertical well production.
Activa Resources CEO Leigh A. Hooper puts the production numbers in
context: 'The current production at OSR-Halliday is an average of 6 BOED
from some 50 wells (total field production 300 BOED), most of which have
been on production for decades already. Our 2008 vertical well IP'd at 80
BOED and new horizontal wells in the region are showing IP's of up to 700
BOED from the Woodbine formation which is the same productive formation in
Activa's OSR-Halliday Unit. The study suggests that 35 - 45 new well
locations for horizontal drilling are possible on our acreage. '
As a result of this work the 2P reserves attributable to Activa's working
interest in the OSR-Halliday field have been estimated at 3.4 million BOE
(1 January 2010) versus 1.68 million BOE (1 January 2009), an increase of
103 % y-o-y. The total potential for Activa's 32 % working interest is
significantly higher, in accordance with the overall field potential as
detailed above.
Activa's other main assets continue to hold reserve value and perform as
estimated with the exception of the Hidalgo Frio Project. Activa's
reservoir engineers have reduced the estimated recoverable reserves net to
Activa by 1 BCF overall (approx 166,000 BOE) in natural gas as a result of
mechanical problems in the SWGU No. 39 well. The Sunny Ernst No. 2 well in
the Loma Field continues to exceed expectations and had a small reserve
addition due to its performance in a secondary objective. The primary pay
zone ('S-Sand') is expected to be placed online in late 2010 or early in
2011 and will potentially double Activa's total revenues (at constant
prices).
In order to fund the development of Activa's low risk drilling portfolio
and to evaluate how best to increase the value of the company's assets for
the benefit of shareholders, Activa has initiated discussions with several
parties. CEO Hooper explains: 'Our cash flows were particularly hard hit in
2009 by the collapse in natural gas prices and we have been unable to
adequately fund the company's drilling program and business plan. We have,
however, continued to aggressively study our asset base from the technical
side, as now evidenced by the results of our work on the OSR-Halliday field
and the continued solid performance of the Loma Field project. Our US
subsidiary is well positioned for strong growth and we are looking at
alternative ways to fund its potential and thereby create value for
shareholders. In particular, we expect to be able to capitalise on the
results of the OSR-Halliday work'.
The Management Board also confirms that the December 2009 capital increase
whereby approx. EUR 3 million of Activa's debt was converted into new
shares was officially recorded by the Bad Homburg corporate register on
January 18th, 2010.
The Management Board
Enquiries: Leigh A. Hooper, CEO, Tel. + 49 6172 483 2352
About Activa Resources AG
Activa Resources AG is an independent oil and gas company which focuses on
the acquisition, development and exploitation of oil and natural gas
properties. Activa Resources AG is listed on the Frankfurt stock exchange
and is based in Bad Homburg, Germany. The company's management and
technical team comprise oil industry experts with many years operational
experience at major international oil companies. Further information can be
found at www.activaresources.com.
Forward-looking statements
This news release includes forward-looking statements. Forward-looking
statements include, but are not limited to, statements concerning estimates
of expected drilling and development wells and associated costs, statements
relating to estimates of, and increases in, production, cash flows and
values andother statements which are not historical facts. When used in
this document, the words such as 'could,' 'plan,' 'estimate', 'expect',
'intend', 'may', 'potential', 'should' and similar expressions are
forward-looking statements. Although Activa believes that its expectations
reflected in these forward-looking statements are reasonable, such
statements involve risks and uncertainties and no assurance can be given
that actual results will be consistent with these forward-looking
statements. Important factors that could cause actual results to differ
from these forward-looking statements include the potential that the
Company's projects will experience technological and mechanical problems,
that geological conditions in the reservoir may not result in commercial
levels of oil and gas production, that changes in product prices can have a
material impact and that Activa fails to raise sufficient capital to
adequately fund its activities.
23.02.2010 07:42 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
Datum: 23.02.2010 - 07:42 Uhr
Sprache: Deutsch
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