26 Jan 2015 07:00
Immediate Release | 26 January 2015 |
GLOBAL ENERGY DEVELOPMENT PLC
(the "Company" or "Global")
Year-End 2014 Reserve Report
Global Energy Development PLC, the Latin America focused petroleum exploration, development and production company (AIM: GED) with operations in Colombia, announces the results of its UK reserve report at 31 December 2014, which has been produced by the independent petroleum engineering firm of Ralph E. Davis Associates, Inc ("RED").
A summary of the results of the 2014 reserve report are as follows:
· Lower oil benchmark price at 31 December 2014 of $57.33 per barrel ("bbl"), with an escalation of 3% each following year, was used to price oil reserves (2013: $109.95 per bbl);
· Lower oil prices resulted in reductions in the estimated quantity of proved and probable reserves and in the estimated future net cash flows expected to be generated from the Company's Colombian contract areas;
· The elimination of anticipated improved recoveries through fracture stimulation (based upon the results of the Catalina #1 well) within the Simiti Formation in the Bolivar Contract area reduced estimated quantities and future net cash flows of proved and probable reserves;
· Low oil prices caused the heavy oil reserves within the Bocachico Contract area to be uneconomic at 31 December 2014. The significant decline in oil prices at 31 December 2014 and the resulting uneconomic nature of the proved and probable reserves within the Bocachico Contract area will require the Company to write down the carrying value of its Bocachico Contract oil assets within its Statement of Financial Position at 31 December 2014 which could be material. Under current accounting standards, the Company may reverse such impairment in the future if there is an indication that the previously recognised impairment loss no longer exists or has decreased.
· All proved and probable reserves associated with the Company's Llanos Basin properties were disposed of in December 2014 through the sale of the entire issued share capital of the Company's wholly owned subsidiary, Colombia Energy Development Company.
Estimated net proved and probable reserves of oil are as follows:
Proved | Probable | Total | |||
Bbls | Bbls | Bbls | |||
(000’s) | (000’s) | (000’s) | |||
Developed | - | - | - | ||
Undeveloped | 19,758 | 4,563 | 24,321 | ||
At 31 December 2014 | 19,758 | 4,563 | 24,321 | ||
Developed | 1,815 | - | 1,815 | ||
Undeveloped | 44,837 | 54,412 | 99,249 | ||
At 31 December 2013 | 46,652 | 54,412 | 101,064 |
Stephen C. Voss, Global's Managing Director, commented, "The decrease in our proved and probable reserves and related write down of the Company's oil assets on its statement of financial position at 31 December 2014 does not affect the Company's cash balance. Given these sustained lower oil prices and the significant loss of value in our reserves combined with the recent sale of our Colombian producing properties, the company is reviewing options for creating value for shareholders in 2015."
For further information please contact:
Global Energy Development PLC Anna Williams, Finance Director awilliams@globalenergyplc.com www.globalenergyplc.com
|
+001 817 310 0240 |
Northland Capital Partners Limited Matthew Johnson / Gerry Beaney
| +44 (0)20 7382 1100 |
Notes to Editors:
The Company's shares have been traded on AIM, a market operated by the London Stock Exchange, since March 2002 (AIM: GED). The Company's portfolio includes exploration and developmental drilling opportunities in Colombia, South America. The Company currently holds two operated contracts in Colombia.
Proven and probable oil and gas reserves are estimated quantities of commercially producible hydrocarbons which the existing geological, geophysical and engineering data show to be recoverable in future years from known reservoirs. The proved reserves reported by RED, an independent petroleum engineering firm, conform to the definition approved by the Society of Petroleum Engineers ("SPE") and the World Petroleum Council ("WPC"). The probable and possible reserves reported by RED conform to definitions of probable and possible reserves approved by the SPE/WPC using the deterministic methodology. The information contained within this announcement has been reviewed by RED. In addition, the information contained within this announcement has been reviewed by Mr. Stephen Voss, a Director of the Company, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies which outlines standards of disclosure for natural resource projects. Mr. Voss is a Registered Professional Engineer in Texas and has been a Member of SPE for 45 years.