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30 Apr 2009 07:00
Emerald Energy Plc
30 April 2009
Operations Update - Syria, Block 26
Emerald Energy Plc ("Emerald" or the "Company") is pleased to provide the following update on the evaluation of reserves in fields held under the contract for exploration, development and production of petroleum in Block 26, Syria (the "Contract").
Khurbet East Field
An independent estimate of the petroleum reserves of the Khurbet East field at 31 December 2008 has been completed by RPS Energy Ltd ("RPS"), part of RPS Group Plc, based on data acquired up to 14 April 2009 which includes the data acquired in the Khurbet East No.8 well but not from the successful flow test after the acid stimulation operation.
The gross Proved plus Probable Reserves of oil contained in the Massive reservoir and recoverable within the period of the Contract are estimated to be 59.2 million barrels as at 31 December 2008 and to be 63.4 million barrels for the life of field. It is anticipated that optimisation of the field development may result in the 4.2 million barrels estimated by RPS to be produced outside the period of the Contract, also being produced within the term of the Contract.
A summary of the oil reserves as at 31 December 2008 is given in the table below.
|
Oil Reserves (million barrels) |
Proved |
Proved plus Probable |
Proved plus Probable plus Possible |
|
Gross |
34.2 |
59.2 |
99.7 |
|
Working Interest |
17.1 |
29.6 |
49.9 |
Under the new estimate of petroleum reserves, the gross Proved plus Probable recovery of oil within the period of the Contract, taking into account the 1.4 million barrels produced before 31 December 2008, has increased by 3.3% since the last evaluation as at 31 December 2007.
Yousefieh Field
An independent estimate of the petroleum reserves of the Yousefieh field at 31 December 2008 has been completed by Fugro Robertson Limited ("FRL"), based on data made available up to 31 March 2009.
The gross Proved plus Probable Reserves of oil produced within the period of the Contract are estimated to be 11.3 million barrels as at 31 December 2008.
A summary of the oil reserves as at 31 December 2008 is given in the table below.
|
Oil Reserves (million barrels) |
Proved |
Proved plus Probable |
Proved plus Probable plus Possible |
|
Gross |
1.2 |
11.3 |
16.7 |
|
Working Interest |
0.6 |
5.7 |
8.4 |
Further to these oil reserves and the associated oil initially in place, FRL estimated there to be an additional area towards the east of the field, including the Yousefieh No.2 well location, with a best estimate of gross Contingent Resource of oil initially in place within this area of 42 million barrels. FRL did not estimate an associated recoverable resource and further work is required to determine whether this volume is commercial and, if so, an appropriate recovery factor.
Block 26 Net Entitlement Reserves
Under the terms of the Contract, there is a single cost recovery pool for all the fields within the Contract. The Operator has estimated the net entitlement Reserves attributable to the Company based on the estimates of gross Reserves provided by RPS and FRL, the terms of the Contract, and the Operator's estimates of future oil price, development costs, and operating costs. Key assumptions include a Brent crude price of $45 per barrel in 2009 rising to $70 per barrel after 2012. It is assumed that the oil sold from Block 26 trades at an average $11 per barrel discount to Brent.
The Operator estimates that the total net entitlement Reserves of oil attributable to the Company at 31 December 2008 from fields in Block 26 is 8.1 million barrels on a Proved basis,14.3 million barrels on a Proved plus Probable basis and 21.9 million barrels on a Proved plus Probable plus Possible basis.
Net entitlement Proved plus Probable Reserves of oil attributable to the Company at 31 December 2008 in Block 26 has increased by 3.4 million barrel (31%) compared to the 10.9 million barrels reported in the annual report for the year ended 31 December 2008.
Emerald's Chief Executive Officer, Angus MacAskill, said:
"We are very pleased with the material increase in reserves in Block 26 with the excellent production performance leading to improved recovery in the Khurbet East field and the addition of new reserves from the Yousefieh discovery. We are encouraged that full field development of the Khurbet East field, appraisal of Yousefieh, and exploration generated by the 3D seismic survey currently being acquired will lead to further opportunities for advancement."
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