Emerald Energy Regulatory News (EEN)

24 Jul 2006 14:19

Emerald Energy PLC24 July 2006 This announcement replaces announcement RNS 6066G released at 7.02 a.m. thismorning. An amendment has been made to paragraph 9 changing the natural gas price figurefrom "$7.24 per million cubic feet" to "$7.24 per thousand cubic feet". Emerald Energy Plc FOR IMMEDIATE RELEASE 24 July 2006 Operations Update - Syria Today Gulfsands Petroleum plc, the operator for Block 26 in Syria, announcedcertain information some of which relates to Block 26 and Emerald Energy Plc("Emerald" or the "Company") would like to provide the following update: Ryder Scott Company, L.P. ("Ryder Scott") has completed an economic valuation ofthe Probable and Possible reserves (unrisked) on the Tigris structure in Block26, Syria. The Ryder Scott report can be viewed on Emeralds' website atwww.emeraldenergy.com. On 30 January 2006 Ryder Scott completed a reserves study on the Tigrisstructure in which two cases were considered as there was insufficient dataavailable at that time to determine with certainty the hydrocarbon fluidcontained within the Tigris structure. This reserves study classified Probableand Possible Reserves and Prospective Resource as follows: • If Tigris is a natural gas accumulation, Ryder Scott has classified 442 billion cubic feet ("bcf") of gas as Probable Reserves, a further 442 bcf of gas as Possible Reserves, and a further 3447 bcf of gas as a Prospective Resource. In summary, total estimated hydrocarbon potential for Probable and Possible Reserves and Prospective Resource in this case is 4330 bcf of gas, equivalent to 722 million barrels of oil equivalent ("mmboe"). •If Tigris is an oil accumulation, Ryder Scott has classified 104 million barrels ("mmbbl") of oil and 64 bcf of gas as Possible Reserves and a further 408 mmbbl of oil and 245 bcf of gas as Prospective Resource. In summary, total estimated hydrocarbon potential for Possible Reserve and Prospective Resource in this case is 512 mmbbl of oil and 308 bcf of gas, equivalent to 563 mmboe. Based upon their estimate of reserves, Ryder Scott has now completed an economicevaluation, as of 1 July 2006 •If Tigris is a natural gas accumulation, Ryder Scott determined the Probable Reserves net to Emerald after applying the fiscal terms of the Production Sharing Contract are 102 bcf of gas having a net present value, discounted at 10%, of $233 million. An additional 75 bcf of gas of Possible Reserves net to Emerald having a net present value, discounted at 10%, of $261 million. In summary total estimated Probable and Possible Reserves for the natural gas case is 177 bcf of gas (30 mmboe) with a net present value of $494 million. •If Tigris is an oil accumulation, Ryder Scott determined the Possible Reserves net to Emerald after applying the terms of the Production Sharing Contract is 19.4 mmbbl of oil having a net present value, discounted at 10%, of $452 million. Natural gas pricing used in the evaluation was based upon June 2006 gas pricesand the pricing formula within the Block 26 Production Sharing Agreement. Oilpricing was based upon the average price for Syrian light crude oil for themonth of June 2006. Natural gas prices were fixed at $7.24 per thousand cubicfeet and oil prices fixed at $66.69 per barrel for the life of the project. Drilling of the Tigris #1 well is expected to commence by September of 2006. Alastair Beardsall, Emerald's Chairman, said: "The Ryder Scott valuation demonstrates the viability of the Tigris prospect ifthe reserves are proved up with the forthcoming drilling program. The potentialreserves, and their economic value, to Emerald outweigh the geological anddrilling risks, we look forward to spudding the Tigris well." Emerald holds a 50% interest in Block 26 in its 100% subsidiary SNG OverseasLtd. Enquiries: Helen Manning 020 7925 2440 This information is provided by RNS The company news service from the London Stock Exchange