Pan Orient Energy Corp. Announces 2019 Year-End Thailand Reserves Update
03 Febrero 2020 - 7:30AM
Pan Orient Energy Corp. ("Pan Orient" or the “Company”) (POE –
TSXV), on behalf of Pan Orient Energy (Siam) Ltd. (“POS”),
announced the results of its December 31, 2019 independent reserves
evaluation for Thailand on-shore Concession L53/48 where POS is the
operator and has a 100% working interest. Pan Orient has a 50.01%
equity interest in POS, which is classified as a Joint Venture
under International Financial Reporting Standards and accounted for
using the equity method. Pan Orient’s 50.01% equity interest in the
assets, liabilities, working capital, operations and capital
expenditures of POS are recorded in Investment in the Thailand
Joint Venture and Pan Orient does not have any direct interest in,
or control over, the crude oil reserves or operations of on-shore
Concession L53/48.
The evaluation for the Thailand assets as at
December 31, 2019 was conducted by Sproule International Limited of
Calgary (“Sproule”) and was prepared in accordance with Canadian
Securities Administrators National Instrument 51-101 – Standards of
Disclosure for Oil and Gas Activities.
Please note that all amounts are in Canadian
dollars unless otherwise stated and BOPD refers to barrels of oil
per day. Reserves volumes reported below are “Company Gross
Reserves”, a classification of reserves used in the evaluation
which represents production and reserves before deduction of
royalties.
Commenting today on the year-end 2019 reserve
report of Pan Orient Energy (Siam) Ltd., President and CEO Jeff
Chisholm stated: “Concession L53 oil sales in 2019 were a record
for the concession, averaging 2,120 BOPD. After accounting for the
773,675 barrels of oil produced in 2019, there were year over year
increases of 37% in 1P reserves, 34% in 2P reserves and 29% in 3P
reserves. Of particular note, estimated ultimate recoveries saw a
substantial 1.152 million barrel increase on a 1P basis, 1.755
million barrel increase on a 2P basis and 2.542 million barrel
increase on a 3P basis resulting mainly from excellent production
performance at the L53DD oil field and a new field oil discovery at
AA South. I am pleased with these results and looking forward with
a great deal of anticipation towards the Thailand 2020 exploration
and appraisal drilling program of four firm exploration and three
firm appraisal wells. This program has commenced with the
L53-DD6ST2 appraisal well located within the L53-DD oil field. An
operations update anticipated in the week of February 10, 2020 will
provide further details with regard to this drilling program and
the first well results.”
Summary of Thailand Reserves at December
31, 2019 for Concession L53/48
- Thailand crude oil reserves and values at December 31, 2019 of
POS (representing the 100% working interest of POS in Concession
L53/48): º Proved oil reserves (“1P”) of
1,235,000 barrels at December 31, 2019, a 37% increase from the
901,000 barrels at December 31, 2018. º Proved
plus probable oil reserves (“2P”) increased 34% to 3,668,000
barrels at December 31, 2019 compared with proved plus probable oil
reserves of 2,731,000 barrels at December 31, 2018. The increase in
2019 reflects the following changes during 2019:
- 2019 oil sales of 773,675 barrels (2,120 BOPD), with 615,460
barrels (1,687 BOPD) from the L53DD field, 68,704 barrels (188
BOPD) from the L53G field, 42,879 barrels (117 BOPD) from the L53A
field, 26,094 barrels (71 BOPD) from the L53D field, 6,785 barrels
(19 BOPD) from the L53B field and 13,753 barrels (38 BOPD) from the
new L53AA South field.
- Discovery of the L53-AA South field with the L53-DD5ST1
exploration well in the second half of 2019 added 13,753 barrels of
oil sales in 2019 and has been assigned proved reserves of 42,000
barrels and proved plus probable reserves of 160,000 barrels at
December 31, 2019.
- The L53-DD field discovered in the fourth quarter of 2018 added
615,460 barrels of oil sales in 2019 and 27,667 barrels of oil
sales in 2018. The L53-DD field at December 31, 2019 has been
assigned proved reserves of 663,000 barrels and proved plus
probable reserves of 2,470,000 million barrels (including a
positive technical revision of proved plus probable reserves in
2019 of 1,366,000 barrels based on well performance).
- Positive technical revisions of proved plus probable reserves
were reported for each of the five existing L53/48 fields totaling
1,548,000 barrels (57% of December 31, 2018 proved plus probable
reserves).
- Net present value (after tax) of Thailand proved plus probable
oil reserves at December 31, 2019, using forecast prices and costs
discounted at 10% per year, of Cdn$87.4 million. The 11% increase
in the net present value (after tax) of Thailand proved plus
probable oil reserves from $79.0 million at December 31, 2018 is
the result of positive technical revisions (primarily at the L53-DD
field) and discovery of the L53-AA South field resulting in a 34%
increase in proved plus probable oil reserves, partially offset by
a 5.3% decrease in average oil sales prices. º
Given the early stage development of the 2018 L53-DD oil discovery,
the Company requested the inclusion of possible oil reserves at
December 31, 2018 and December 31, 2019 in order to better define
the potential upside of the field. Possible reserves are
those additional reserves that are less certain to be recovered
than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of
proved plus probable plus possible reserves. º Possible
oil reserves increased 25% to 3,909,000 barrels at December 31,
2019 from 3,122,000 barrels at December 31, 2018. Total
proven plus probable plus possible oil reserves (“3P”) are
7,577,000 barrels at December 31, 2019 with a net present value
(after tax) using forecast prices and costs discounted at 10% per
year, of Cdn$157.0 million.
º
Thailand Concession L53/48 reserves are from conventional sandstone
reservoirs.
- Net to Pan Orient’s 50.01% equity interest in POS:
º Pan Orient does not have any direct interest in, or
control over, the crude oil reserves or operations of on-shore
Concession L53/48. The values at December 31, 2019 identified
as “Net to Pan Orient’s 50.01% Equity Interest in Pan Orient Energy
(Siam) Ltd.” represent 50.01% of POS reserves and values.
º Net to Pan Orient’s 50.01% equity interest in POS,
proved plus probable crude oil reserves of 1,834,000 barrels at
December 31, 2019. Net to Pan Orient’s 50.01% equity interest
in POS, net present value (after tax) of Thailand proved plus
probable crude oil reserves at December 31, 2019, using forecast
prices and costs discounted at 10% per year, of Cdn$43.7 million,
or $0.80 per Pan Orient share based on the current 54.5 million Pan
Orient shares outstanding. º Net to Pan Orient’s
50.01% equity interest in POS, proved plus probable plus possible
crude oil reserves of 3,789,000 barrels at December 31, 2019. Net
to Pan Orient’s 50.01% equity interest in POS, net present
value (after tax) of Thailand proved plus probable plus possible
crude oil reserves at December 31, 2019, using forecast prices and
costs discounted at 10% per year, of Cdn$78.5 million, or $1.44 per
Pan Orient share based on the current 54.5 million Pan Orient
shares outstanding.
Summary of Thailand Crude Oil Reserves as of
December 31, 2019, as provided by Sproule |
Net to Pan Orient’s 50.01% Interest in Pan Orient Energy
(Siam) Ltd. |
Marketable Reserves – Company Gross (thousands of barrels) |
Light and Medium Oil |
Heavy Oil |
Total |
Proved |
543 |
75 |
618 |
Probable |
958 |
259 |
1,217 |
Total Proved plus
Probable |
1,501 |
334 |
1,834 |
Possible |
1,575 |
380 |
1,955 |
Total Proved, Probable & Possible |
3,076 |
714 |
3,789 |
Summary of Thailand Net Present Values as of
December 31, 2019, as provided by Sproule (After Income Tax) |
Net to Pan Orient’s 50.01% Interest in Pan Orient Energy
(Siam) Ltd. |
Present Value - After Tax (Cdn$ million) |
Undiscounted |
|
5 |
% |
|
10 |
% |
|
15 |
% |
Proved |
|
17 |
|
16 |
|
|
15 |
|
|
15 |
|
Probable |
|
38 |
|
33 |
|
|
28 |
|
|
25 |
|
Total Proved plus
Probable |
|
55 |
|
49 |
|
|
44 |
|
|
40 |
|
Possible |
|
66 |
|
46 |
|
|
35 |
|
|
28 |
|
Total Proved, Probable & Possible |
|
121 |
|
94 |
|
|
79 |
|
|
68 |
|
Per Pan Orient share -
Proved & Probable Note |
$ |
1.01 |
$ |
0.89 |
|
$ |
0.80 |
|
$ |
0.73 |
|
Per Pan Orient share - Proved & Probable & Possible
Note |
$ |
2.22 |
$ |
1.73 |
|
$ |
1.44 |
|
$ |
1.25 |
|
Note: Per share values were calculated based on
54,496,007 Pan Orient shares currently outstanding
Summary of Thailand Crude Oil Reserves as of
December 31, 2019, as provided by Sproule |
Pan Orient Energy (Siam) Ltd. (with a 100% working interest
in Concession L53/48) |
Marketable Reserves – Company Gross (thousands of barrels) |
Light and Medium Oil |
Heavy Oil |
Total |
Proved |
1,085 |
150 |
1,235 |
Probable |
1,915 |
518 |
2,433 |
Total Proved plus
Probable |
3,000 |
668 |
3,668 |
Possible |
3,150 |
759 |
3,909 |
Total Proved, Probable & Possible |
6,150 |
1,427 |
7,577 |
Summary of Thailand Crude Oil Reserves as of
December 31, 2019, by Major Field as provided by Sproule – Company
Gross (thousands of barrels) |
|
Pan Orient Energy (Siam) Ltd. (with a 100% working interest
in Concession L53/48) |
|
Concession L53/48 (by Major Field) |
Proved |
Probable |
Proved plus Probable |
Possible |
Proved, Probable & Possible |
L53A Field |
138 |
104 |
242 |
124 |
366 |
L53B Field |
75 |
133 |
209 |
260 |
469 |
L53D Field |
184 |
179 |
363 |
142 |
506 |
L53G Field |
132 |
93 |
225 |
102 |
327 |
L53DD Field |
663 |
1,807 |
2,470 |
3,030 |
5,500 |
L53AA South Field |
42 |
117 |
160 |
250 |
410 |
|
1,235 |
2,433 |
3,668 |
3,909 |
7,577 |
Reconciliation of Changes in Thailand Crude Oil Proved plus
Probable Reserves as of December 31, 2019, as provided by Sproule –
Company Gross (Light and Medium Oil and Heavy Oil)Pan
Orient Energy (Siam) Ltd. (with a 100% working interest in
Concession L53/48) |
(thousands of barrels) |
|
Proved |
|
Probable |
|
|
Proved plus Probable |
|
December
31, 2018 |
|
901 |
|
1,830 |
|
2,731 |
|
Extensions |
|
- |
|
- |
|
- |
|
Improved
Recovery |
|
- |
|
- |
|
- |
|
Technical
Revision |
|
1,053 |
|
495 |
|
1,548 |
|
Discoveries |
56 |
|
117 |
|
173 |
|
Acquisitions |
|
- |
|
- |
|
- |
|
Dispositions |
|
- |
|
- |
|
- |
|
Economic
Factors |
|
(1 |
) |
(9 |
) |
(10 |
) |
Production |
|
|
(774 |
) |
- |
|
(774 |
) |
December 31, 2019 |
|
1,235 |
|
2,433 |
|
3,668 |
|
Summary of
Thailand Net Present Values as of December 31, 2019, as provided by
Sproule (After Income Tax)Pan Orient Energy (Siam) Ltd.
(with a 100% working interest in Concession L53/48) |
Present Value - After Tax (Cdn$ million) |
Undiscounted |
5% |
|
10% |
|
15% |
|
Proved |
33 |
32 |
|
30 |
|
29 |
|
Probable |
77 |
66 |
|
57 |
|
50 |
|
Total Proved plus
Probable |
110 |
97 |
|
87 |
|
80 |
|
Possible |
132 |
91 |
|
70 |
|
56 |
|
Total Proved, Probable & Possible |
242 |
188 |
|
157 |
|
136 |
|
Thailand
Concession L53/48 Reserves Evaluation as of December 31, 2019, as
provided by Sproule Pan Orient Energy (Siam) Ltd. (with a
100% working interest in Concession L53/48) |
Notes: |
|
|
|
|
|
|
1 |
) |
Pan Orient Energy (Siam) Ltd. is the operator and 100% working
interest owner of Concession L53/48. Pan Orient holds a
50.01% equity interest in Pan Orient Energy (Siam) Ltd.
Thailand reserves and values at December 31, 2019 shown as “100%
working interest of Pan Orient Energy (Siam) Ltd.” represent a 100%
working interest in Concession L53/48. |
|
2 |
) |
Reserves volumes reported above are “Company Gross Reserves”, a
classification of reserves used in the evaluation which represents
production and reserves before deduction of royalties. |
|
3 |
) |
The tables shown have assessed reserves at forecast crude oil
reference prices & costs. |
|
4 |
) |
The US$ reference price for crude oil per barrel (US$ UK Brent per
barrel) is $65.00 for 2020, $68.00 for 2021, $70.00 for 2022,
$71.40 for 2023, $72.83 for 2024, and prices increase at 2.0% per
year thereafter. |
|
5 |
) |
Oil revenue for these reserves is based on 90% of the forecast
crude oil Brent reference price. |
|
6 |
) |
Tables show assessed reserves with a foreign exchange rate of
CDN$1=US$0.76 for 2020, CDN$1=US$0.77 for 2021, CDN$1=US$0.80
thereafter. |
|
7 |
) |
The capital cost and operating expense inflation rate is 1% per
year in 2021 and 2.0% per year starting in 2022. |
|
8 |
) |
Estimated future undiscounted development costs, in dollars, at
December 31, 2019 were Cdn$10.5 million for proved reserves,
Cdn$21.2 million for proved plus probable reserves and Cdn$23.8
million for proved plus probable plus possible reserves. |
|
9 |
) |
Net present values after income tax are after deduction of the SRB
(Special Remuneratory Benefit tax) and income tax in Thailand. SRB
tax rate is forecast to be zero percent per year based on the
forecast oil rates and prices. |
|
10 |
) |
Well abandonment and reclamation costs of Cdn$4.0 million for the
proved plus probable case were included in this report and include
abandonment and reclamation costs for all existing and future
wells. Well abandonment and reclamation costs of Cdn$4.8
million were included for the proved plus probable plus possible
case. No allowances for reclamation or salvage values were
made. |
|
11 |
) |
The net present values disclosed may not represent fair market
value. |
|
12 |
) |
Totals may not add exactly due to rounding. |
|
Pan Orient is a Calgary, Alberta based oil and
gas exploration and production company with operations currently
located onshore Thailand, Indonesia and in Western Canada.
This news release contains forward-looking
information. Forward-looking information is generally identifiable
by the terminology used, such as "expect", "believe", "estimate”,
"should", "anticipate" and "potential" or other similar wording.
Forward-looking information in this news release includes, but is
not limited to, references to: estimates of reserves and the
net present value of those reserves, anticipated future production
performance, estimates of future crude oil reference prices and the
percentage of those prices received by Pan Orient, and estimates of
development costs, foreign exchange rates, inflation rates, taxes
and well abandonment and disconnect costs. By their very nature,
the forward-looking statements contained in this news release
require Pan Orient and its management to make assumptions that may
not materialize or that may not be accurate. The forward-looking
information contained in this news release is subject to known and
unknown risks and uncertainties and other factors, which could
cause actual results, expectations, achievements or performance to
differ materially, including without limitation: imprecision of
reserve estimates and estimates of recoverable quantities of oil,
changes in project schedules, operating and reservoir performance,
the effects of weather and climate change, the results of
exploration and development drilling and related activities, demand
for oil and gas, commercial negotiations, other technical and
economic factors or revisions and other factors, many of which are
beyond the control of Pan Orient. Although Pan Orient believes that
the expectations reflected in its forward-looking statements are
reasonable, it can give no assurances that the expectations of any
forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FOR FURTHER INFORMATION, PLEASE
CONTACT:Pan Orient Energy Corp.Jeff Chisholm, President
and CEO (located in Bangkok, Thailand)Email: jeff@panorient.ca
- or -
Bill Ostlund, Vice President Finance and
CFOTelephone: (403) 294-1770
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