Last checked at 26 Mar 2014 07:00
26 March 2014
Independent Resources plc (AIM: IRG)
Publication of Competent Person's Report on Ksar Hadada
Estimated 108MM BOE of prospective resources
Independent Resources ("Independent" or "the Company" today announces the release of a third-party evaluation ("Competent Persons Report" or "CPR") of the Ksar Hadada permit onshore Tunisia.
The CPR was prepared by Blackwatch Petroleum Services Limited ("Blackwatch").
Blackwatch's evaluation covers the Sidi Toui and Gazelle prospects within the Ksar Hadada permit area. The report attributed a 38% chance of success to the Sidi Toui prospect and a 19% chance of success to the Gazelle prospect. These risk factors have been used to derive the risked resources and risked economic values outlined below.
As announced in February 2014, Tunisia's national oil company, Entreprise Tunisienne d'Activités Pétrolières (ETAP) with the support of the Company has made an application on 19 February 2014 for Independent Resources to be the Operator of the Ksar Hadada licence with an interest of 86.345% of the Production Sharing Contract for the extension period of two years. Approval by the Consultative Commission on Hydrocarbons of Tunisia is expected next month.
Key findings
(a) Resources in place and recoverable resources
For the combined Sidi Toui and Gazelle prospects, on a Pmean and gross basis (100% interest) the CPR estimates:
Total oil and gas in place | 639.3 million barrels of oil equivalent ("BOE") |
Total recoverable resources (unrisked) | 107.9 million BOE |
Total recoverable resources (risked) | 33.9 million BOE |
(b) Economic valuation of licence
In compiling its report, Blackwatch has prepared an economic valuation of the Sidi Toui and Gazelle prospects, assuming an oil price of US$95 per barrel and applying a 10 per cent. discount rate to all future cashflows.
This exercise attributes the following combined post-tax economic values on a gross basis (100% interest) to the Sidi Toui and Gazelle prospects:
NPV10 (Unrisked) | US$ 837 million |
NPV10 (Risked) | US$ 263 million |
Further detail of the estimates contained in the CPR is set out in Appendix I to this announcement.
Information on Ksar Hadada
The Ksar Hadada exploration permit covers an onshore area of 2,252 square kilometres in south-east Tunisia. The primary targets on the Ksar Hadada block are the Ordovician Bir Ben Tartar quartzites and the Silurian Acacus Sandstone, sourced by the basal member of the Silurian Tanezzuft Shale, which is the main source rock for North Africa.
Independent has held an interest in the Ksar Hadada licence since 2005 and currently holds an interest of 18.97% in the licence. In February 2014, ETAP with the support of Independent and the other minority partners submitted an application for to extend the period of the Ksar Hadada permit by two years until 19 April 2016 and for Independent to be the operator of the Ksar Hadada licence with an interest of 86.345%.
Future work programme
Once the award of operatorship is granted and the licence extension is granted, Independent and its partners in the licence expect to commence a work programme including 200km2 of 3D seismic, re-entry of one existing well and drilling one new well.
Shooting of the seismic is expected to begin in the third quarter of this year with drilling beginning in the first quarter of 2015.
In due course, IRG expects to bring in partners to fund a significant portion of the work programme.
Greg Coleman, CEO, stated:
"The Board expects that Tunisia will be one of the core areas for Independent as we implement our Mediterranean Basin exploration and production strategy over the coming months. The findings of the evaluation by Blackwatch clearly indicate the potential value of the Ksar Hadada opportunity.
We look forward to formal announcement of the award of the two year extension and the award of operatorship, which we currently expect next month and to progressing with the work programme.
For further information, please visit www.ir-plc.com or contact: | ||
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Greg Coleman | Independent Resources plc | 020 3367 1134 |
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Phil Davies | Charles Stanley Securities (Nominated Adviser) | 020 7149 6942 |
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Simon Hudson | Tavistock Communications | 020 7920 3150 |
About Blackwatch
Blackwatch Petroleum Services Ltd (Blackwatch) is an independent provider of geological, petroleum engineering, well testing and drilling engineering services to the international petroleum industry. The company specialises in the modelling, estimation, assessment and evaluation of oil and gas assets. Except for the provision of professional services on a fee basis, Blackwatch does not have any interest in or commercial arrangement with any persons employed by or acting for Independent.
The CPR was prepared under the supervision of Samuel L Metcalfe, BA Geology, BSc Civil Engineering, and MSc Petroleum Engineering, and Terry Pimble BSc Geology, MSc Geophysics. Mr Metcalfe is Managing Director of Blackwatch and has over thirty years of experience in the international oil industry in the estimation, assessment, evaluation, exploration, development and management of hydrocarbon reserves and resources. Mr Pimble is a Geoscience Director and Chief Geophysicist with over thirty years of experience in the international oil industry in the estimation, assessment and evaluation of hydrocarbon reserves.
Blackwatch classified the prospective resources according to the SPE/WPC/AAPG/SPEE Petroleum Resources Management System ("PRMS"),
Roberto Bencini, Technical Director of Independent Resources, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Bencini is a Chartered Petroleum Geologist. He is a member of the Society of Petroleum Engineers, the Geological Society of London and the American Association of Petroleum Geologists.
* The evaluation of the potential recoverable hydrocarbons mentioned in this announcement has been assessed in accordance with Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) 2007, and the Guidelines for Application of the Petroleum Resources Management System, November 2011. Both documents were reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).
Appendix I
Supplementary detail from the CPR
(a) Resources in place and recoverable resources
Sidi Toui
For the Sidi Toui prospect, on a Pmean and gross basis the CPR estimates:
Total oil in place | 425.5 million barrels |
Total gas in place | 170.0 BCF |
Total oil and gas in place | 453.8 million BOE |
Total recoverable resources (unrisked) | 70.8 million BOE |
Total recoverable resources (risked) | 26.9 million BOE |
Gazelle
For the higher risk, Gazelle prospect, on a Pmean and gross basis the CPR estimates:
Total oil in place | 173.9 million barrels |
Total gas in place | 69.5 BCF |
Total oil and gas in place | 185.5 million BOE |
Total recoverable resources (unrisked) | 37.1 million BOE |
Total recoverable resources (risked) | 7.1 million BOE |
(b) Economic valuation of licence
In compiling its report, Blackwatch has prepared an economic post-tax valuation of the Sidi Toui and Gazelle prospects on a gross basis (100% interest) assuming an oil price of US$95 per barrel and applying a 10 per cent. discount rate to all future cashflows:
| NPV10 (Unrisked) | NPV10 (Risked) |
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Sidi Toui | US$ 547 million | US$ 208 million |
Gazelle | US$ 291 million | US$ 55 million |
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Combined | US$ 837 million | US$ 263 million |
Appendix II
Glossary of terms
The following table provides an explanation of certain technical terms and abbreviations used in this announcement. The terms and their assigned meanings may not correspond to standard industry meanings or usage of these terms.
"BOE" | barrels of oil equivalent. One barrel of oil is approximately the energy equivalent of 6,000 cf of natural gas |
"Bcf" | billion (109) standard cubic feet; 1 Bcf is approximately equal to 166,666 Boe using a factor of 6.0 Bcf per MMBbls |
"gross basis" | assuming a 100% interest in the licence |
"oil equivalent" | international standard for comparing the thermal energy of different fuels |
Pmean | a value that has a "mean" chance of being equaled or exceeded, where mean is the arithmetic average of the set of possible outcomes, the expected value |
"prospective resources" | those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects |
"recoverable resources" | those quantities of hydrocarbons which are estimated to be producible from accumulations, either discovered or undiscovered. |
"resources" | deposits of naturally occurring hydrocarbons which, if recoverable, include those volumes of hydrocarbons either yet to be found (prospective) or if found the development of which depends upon a number of factors (technical, legal and/or commercial) being resolved (contingent) |
"resources in place" | all those estimated quantities of petroleum contained in the subsurface, as well as those quantities already produced. |
"seismic" | a method by which an image of the earth's subsurface is created through the generation of shockwaves and analysis of their reflection from rock strata. Such surveys can be done in two or three dimensional form |