Wednesday, May 11, 2016

Jericho's P+P reserves at 1.24 MM boe for Kansas, Okla.

2016-05-04 09:05 ET - News Release

Mr. Allen Wilson reports
Jericho Oil Corp. has provided the results of its 2015 year-end reserves evaluation of its Kansas and Oklahoma properties as prepared by Cawley, Gillespie & Associates Inc. (CGA), the company's independent reserves evaluator. The evaluation was prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101.

Highlights of the reserve report (all dollar amounts in U.S. dollars)
Jericho deployed capital of $6.29-million -- inclusive of acquisition costs -- for the year ending Dec. 31, 2015, and achieved significant reserve value growth (all dollar amounts are the present value of future cash flows discounted at 10 per cent before tax derived from the year-end 2015 independent reserve report using forecast pricing:
  • Proved plus probable (2P) reserves total $17.1-million or 1.24 million barrels of oil equivalent;
  • Proved (1P) reserves total $15.7-million or 1.07 million barrels of oil equivalent;
  • Proved developed (PDP plus PDNP) reserves (the most certain of reserves) totalled 966,000 barrels of oil equivalent, 367-per-cent increase year over year;
  • Proved developed reserves accounted for 90 per cent of the total proved reserves.
A critical measure of capital efficiency is the true cost of finding and developing the company's oil and gas reserves. As a result of the distressed marketplace, Jericho drove down the cost to find and develop its proved developed reserves by 69 per cent. All-in finding and development costs went from $26.80 to $8.28 per barrel (exploration costs plus proved property acquisition costs plus development cost) divided by (barrels derived from: extensions plus discoveries plus revisions plus improved recovery plus acquisitions). Jericho spent about $6.29-million yielding an increase of 760,000 barrels of oil equivalent in 2015.
Allen Wilson, chief executive officer of Jericho Oil, stated: "As a result of Jericho's acquisition strategy throughout the prolonged oil price downturn the company increased production and reserves, the main drivers of our company's intrinsic value. We increased proved developed reserves PV-10 by over 275 per cent while decreasing our finding and development costs significantly. Our current asset base is producing strong field-level cash margins at current oil prices and have significant development optionality should oil prices recover."
Attached, please find the charts outlining the present value and per-barrel reserves summary of Jericho's asset base.
                    NET PRESENT VALUE ($M, U.S.) 

                                                Discounted  at
Reserve category           Net boe        0%      5%     10%     15%     20%
Proved producing           713,500    21,720  14,104 10,334    8,133   6,704
Proved non-producing       252,900    11,102   6,607  4,499    3,320   2,579
Proved undeveloped         110,000     2,726   1,545    937      587     369
                        ----------    ------  ------ ------   ------  ------
Total proved             1,076,400    35,549  22,256 15,769   12,040   9,653
                        ==========    ======  ====== ======   ======  ======
Total probable             165,000     4,136   2,342  1,244      894     566
                        ----------    ------  ------ ------   ------  ------
Proved plus probable    1,241,400     39,685  24,598 17,191   12,934  10,219
                        ==========    ======  ====== ======   ======  ======
We seek Safe Harbor.

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