6 Dec 2012 07:51
6 December 2012
VOLGA GAS PLC
Independent reserve report
Volga Gas plc ("Volga Gas" or the "Company"), the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce the completion of an independent evaluation of the Company's oil, gas and condensate reserves by Miller and Lents Ltd.
The independent assessment of the reserves and net present value of future net revenue* ("NPV") attributable to the Company's three principal fields, Dobrinskoye, Vostochny Makarovskoye and Uzenskoye, as at 1 August 2012, was prepared in accordance with reserve definitions prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE). The NPV evaluation was conducted on a constant pricing basis, assuming no future escalations of oil prices, operating expenses, capital, or mineral extraction taxes above the respective 1 August, 2012 values*.
The reserve report attributes Proved and Probable ("2P") reserves of 16.1 million barrels ("mmbbl") of oil and condensate and 167.5 billion cubic feet ("bcf") of gas, a total of 44.0 million barrels of oil equivalent ("mmboe"), to the Company's principal fields, and an NPV of US$301.2 million with a 10% per annum discount rate.
A summary of the evaluation for each field is in the following table:
Proved Reserves | Oil & Condensate | Gas | Total | NPV10% |
(mmbbl) | (bcf) | (mmboe) | $mln | |
Uzenskoye | 4.925 | 0.0 | 4.925 | 49.4 |
Dobrinskoye | 1.927 | 23.4 | 5.827 | 41.6 |
VM | 7.948 | 133.2 | 30.148 | 201.4 |
Total Proved Reserves | 14.800 | 156.6 | 40.900 | 292.4 |
Proved plus Probable Reserves | Oil & Condensate | Gas | Total | NPV10% |
(mmbbl) | (bcf) | (mmboe) | $mln | |
Uzenskoye | 5.578 | 0.0 | 5.578 | 52.4 |
Dobrinskoye | 1.927 | 23.4 | 5.827 | 41.6 |
VM | 8.599 | 144.1 | 32.622 | 207.2 |
Total Proved plus Probable Reserves | 16.104 | 167.5 | 44.027 | 301.2 |
Mikhail Ivanov, Chief Executive of Volga Gas commented:
"This report is a welcome third party validation of our reserves and the NPV attributed to them, which highlights the potential value contained within our acreage. We look forward to delivering this value as well as further exploration and appraisal opportunities."
Notes:
1. Future net revenues are defined as the total gross revenues less operating costs, Mineral Extraction Tax ("MET") and capital expenditures. The total gross revenues are the total revenues received at the wellhead. The future net revenues include deductions for other capital and property taxes but do not include deductions for profit taxes.
2. The constant price assumptions used in the calculation of future cash flows were as follows: Crude Oil - US$49.53 per barrel; Condensate - US$47.66 per barrel; Natural Gas - US$2.40 per mcf.
For additional information please contact:
Volga Gas plc | |
Mikhail Ivanov, Chief Executive Officer | +7 (495) 721 1233 |
Tony Alves, Chief Financial Officer | +44 (0) 20 8622 4451 |
Oriel Securities Limited, Nominated Adviser and Broker | |
Michael Shaw Gareth Price | +44 (0)20 7710 7600 |
FTI Consulting | |
Billy Clegg | +44 (0)20 7831 3113 |
Ed Westropp | |
Alex Beagley |
Editors' notes:
Volga Gas is an independent oil and gas exploration and production company operating in the Volga region of European Russia. The Company has 100% interests in its five licence areas.
The information contained in this announcement has been reviewed and verified by Mr. Mikhail Ivanov, Director and Chief Executive Officer of Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock Exchange in June 2009. Mr. Mikhail Ivanov holds a M.S. Degree in Geophysics from Novosibirsk State University. He also has an MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of Petroleum Engineers.