Petrominerales Ltd.

Petrominerales Ltd.
Petrobank Energy and Resources Ltd.

Petrobank Energy and Resources Ltd.

February 22, 2010 00:19 ET

Petrominerales Proved Plus Probable Reserve Additions Replace 299% of 2009 Production

BOGOTA, COLOMBIA--(Marketwire - Feb. 22, 2010) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG), a 66% owned subsidiary of Petrobank Energy and Resources Ltd. (TSX:PBG), is pleased to report a 44% increase in proved plus probable reserves to 53.1 million barrels of oil as at December 31, 2009 (as determined by our independent reserves evaluators DeGolyer and MacNaughton ("D&M")), replacing 2009 production by 299%.


  • Total proved reserves increased by 43% to 36.0 million barrels of oil and proved plus probable reserves increased by 44% to 53.1 million barrels of oil.
  • Total proved reserve additions replaced production by 232% and proved plus probable reserve additions replaced 299% of production.
  • Total proved plus probable NPV 10% (before tax) is US$2.1 billion.
  • D&M's total proved plus probable forecasted production for 2010 is 37,923 barrels of oil per day ("bopd").
  • Based on unaudited capital expenditures of US$281 million, total proved and proved plus probable finding and development costs ("F&D") are $18.51/bbl and $13.98/bbl in 2009, respectively, including changes in future development costs.

D&M completed an evaluation effective as at December 31, 2009 of the Company's Orito and Neiva properties and portions of the Corcel, Guatiquia, Mapache and Rio Ariari blocks. D&M's report did not include any evaluation of the Company's remaining 1.7 million acres of exploration land in Colombia or 2.6 million acres in Peru. All reserves stated herein are based on forecast prices and costs and are Company interest reserves before royalties.

Company Gross Reserves Reconciliation (MBBL)
  Proved Developed Producing Total Proved Proved Plus Probable
December 31, 2008 Reserves            14,229   25,174       36,849
2009 Production (8,162) (8,162) (8,162)
Net Additions            12,466   18,975       24,420
December 31, 2009 Reserves            18,533   35,987       53,107
Year over year increase in reserves 30% 43% 44%
Production replacement 153% 232% 299%
Net Present Value of Future Net Revenue Before Tax (US$ Millions)(1)
      0% 8% 10%
Proved Developed Producing     1,085     898         844
Total Proved     2,018     1,588   1,458
Proved Plus Probable         2,930     2,353     2,082

(1) Using forecast prices and costs.

Net Present Value of Future Net Revenue After Tax (US$ Millions)(1)
      0% 8% 10%
Proved Developed Producing       922     749  715
Total Proved      1,557  1,201 1,134
Proved Plus Probable        2,173    1,652  1,555

(1) Using forecast prices and costs.


Company Gross Reserves By Block (MBBL)
  Corcel Orito Neiva Guatiquia Other Total
Proved Developed 7,136 4,250 3,436    3,414 297          18,533
Total Proved 10,612 10,612  8,152   6,314  297  35,987
  Probable 6,540 4,676 1,841    4,063                 -            17,120
Proved Plus Probable 17,152  15,288  9,993  10,377       297           53,107

The proved undeveloped reserves include the following:

  • Three wells at Corcel (E-2, Boa-2 and C-2);
  • One well at Guatiquia (Candelilla-2);
  • 21 wells at Neiva; and
  • 20 wells at Orito.

The probable undeveloped reserves include the following:

  • Corcel A-3 side-track;
  • Candelilla-3;
  • 17 wells at Neiva; and
  • 6 wells at Orito.
Future Net Revenue, Undiscounted, Forecast Prices and Costs (US$ Millions)
  Revenue Royalty Operating Costs Development Costs Future Net Revenue Before Taxes Income Taxes Future Net Revenue After Taxes
Total Proved 2,842 328 292 204 2,018 461 1,557
Proved Plus Probable 4,218 602 391 295 2,930 757 2,173

The reserves and future net revenue were determined using the following price assumptions:

2010 80.00
2011 82.88
2012 85.83
2013 88.88
2014 92.01
Thereafter +2% per year

Finding and Development Costs(1)

Petrominerales' all-in 2009 F&D costs of $13.98/bbl for total proved reserves and $18.51/bbl for total proved plus probable reserves include $53 million (2008 - $57 million) of exploration costs incurred on exploration acreage not evaluated by D&M. In addition, Petrominerales spent $78 million (2008 - $50 million) on facilities and infrastructure in the year.

    2009 2008 Three-Year Average
Capital expenditures (US$ Millions)              281         268      231
Change in future costs to develop (US$ Millions)      
  Total Proved 70 (54)        33
  Proved plus probable 60 (149) 26
Total costs (US$ Millions)      
  Total Proved              351         214      263
  Proved plus probable              341         119      256
Net reserve additions (MBBL)      
  Total Proved 18,975 8,591        12,113
  Proved plus probable 24,420 3,886        14,164
F&D costs (US$ per BBL)      
  Total Proved                  18.51             24.95         21.75
  Proved plus probable                  13.98             30.66         18.10

(1) The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

(2) The total undiscounted future development costs included in the December 31, 2009 D&M report was $204.3 million (2008 - $133.9 million) for total proved reserves and $294.8 million (2008 - $234.4 million) for proved plus probable reserves.

The disclosures required in accordance with National Instrument 51-101 of the Canadian Securities Administrators will be available in the Company's Annual Information Form to be filed on the SEDAR website at in early March. Estimated values of future net revenue disclosed in this press release do not represent fair market values.

Petrominerales Ltd. is a Latin America-based exploration and production company producing oil in Colombia with 14 exploration blocks covering a total of 1.8 million acres in the Llanos and Putumayo Basins and 2.6 million gross acres in the Ucayali Basin of Peru. Petrominerales is 66% owned by Petrobank Energy and Resources Ltd. (TSX:PBG).

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to the reserves of the Company. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information

  • Petrominerales Ltd.
    John D. Wright
    President and Chief Executive Officer
    403.750.4400 or 011.571.629.2701
    Petrominerales Ltd.
    Corey C. Ruttan
    Vice President Finance and Chief Financial Officer
    403.750.4400 or 011.571.629.2701
    Petrominerales Ltd.
    Jack F. Scott
    Executive Vice President and Country Manager, Colombia
    403.750.4400 or 011.571.629.2701
    Petrominerales Ltd.
    Kelly D. Sledz
    Finance Manager
    403.750.4400 or 011.571.629.2701