SOURCE: America Resources Exploration, Inc.

America Resources

August 25, 2015 05:34 ET

America Resources Exploration Releases Reserves Estimates for Its Utah Leases

HOUSTON, TX--(Marketwired - August 25, 2015) - America Resources Exploration, Inc. (OTC PINK: AREN) ("America Resources" or "the Company"), today announced that it has received its petroleum engineer's reserve estimates for its newly acquired Emery County, Utah leases.

Summary

The purpose of this report is to evaluate the recently acquired properties in Emery County, Utah. The properties contain about 2,800 total acres. The closest producing fields are the 1) Salt Wash Field located about 18 miles east and 2) the Big Flat Field about 24 miles Southeast. The acreage of interest would be considered fairly wildcat in nature.

The High-case reserves for all of the acreage owned by the company are shown in the table below:

  T23S-R13E T23S-R14E Total
Reserves, bbls oil 752,608 1,128,911 1,881,519
Reserves, mcf gas 564,456 846,684 1,411,139

Reserve Calculations Methodology

When there is no nearby offset production to use in calculating reserves the two most common methods used are: 1) Analogy to closest field and 2) Volumetric calculations for Original-Oil-In-Place (OOIP) and recovery factor.

Big Flat Field - Cane Creek Shale Formation
Fidelity Exploration and Production Company completed 4 wells in 2013 and another 6 in 2014 all in the Big Flat Field. Below is a table of some of the recent wells and their cumulative oil production. Big Flat Field has a cumulative production of 4,578,985 bbls of oil and 3,144,095 MCF gas. Fidelity has estimated that their new drill wells will recover 250,000 to 1,000,000 bbls of oil per well. Based on the performance of these recent wells, the mid case reserves using the Big Flat Field as an analogy is: 250,000 bbls of oil and the low case is 125,000 bbls of oil.

Well Name Date   1st Production Cum. Oil Production
Kane Springs Fed 10-1 1992 656,413
Cane Creek Unit 26-2 2012 216,146
Cane Creek Unit 12-1 2012 827,839
Cane Creek Unit 18-1 2012 412,000
Cane Creek Unit 26-3 2013 316,578
Cane Creek Unit 36-1 2013 531,157

Salt Wash Field-Leadville Formation
The Salt Wash field had a maximum of 5 producing wells. The field was developed using vertical wells only. Production start in 1961 and the last well was plugged and abandoned in 2014. Cumulative oil production is about 890,000 bbls of oil. This field produced from the Mississippian-age Leadville formation. This formation would be a target in new wells drilled in the area under evaluation. I did review this field, but I did not use it as an analogy for the area of interest.

Volumetric Calculations
Fidelity Exploration Company is keeping much of their technical data confidential for competitive reasons. From the UGS study that is to be completed in fall of 2015, there were published values for porosity, reservoir pressure gradient, gas to oil ratio and net thickness. Values for water saturation and recovery factor were taken from other well established shale plays.

Estimated Gross Reserves (Prospective Resources)

T23S - R13E                   
      High Case           Low Case   
  Section 2   Section 16   Section 32    Section 2   Section 16   Section 32
Reserves, bbls 752,608   0   0    188,152   0   0
Reserves, mcf 564,456   0   0    141,114   0   0
                    
Combined Reserves                   
Reserves, bbls 752,608              188,152   
Reserves, mcf 564,456              141,114   
                    
T23S - R14E                   
  High   Case       Low   Case   
  Section 2   Section 36       Section 2   Section 36   
Reserves, bbls 627,173   501,738       156,793   125,435   
Reserves, mcf 470,380   376,304       117,595   94,076   
                    
Combined Reserves                   
Reserves, bbls 1,128,911          282,228      
Reserves, mcf 846,684          211,671      
                    
Total Reserves                   
Reserves, bbls 1,881,519          470,380      
Reserves, mcf 1,411,139          352,785      

The reserves estimated by using the Big Flat Field as an analogy are almost identical to those estimated by the volumetric method. This close agreement gives confidence that the reserves estimated are reasonable.

The reserves would be classified as Prospective Resources. Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added.

Reserve Estimator's Qualifications
Mr. Randy Chillion has been a Petroleum Engineer for 36 years. Was employed by Amoco/BP for 34 years (Amoco and BP merged in 1999). One of his functions during that time was as a "Certified Reserve Estimator" within BP, meaning that BP deemed that he had sufficient training, experience and expertise to use the reserve estimates he calculated as their official reserves estimates to reporting agencies such as the SEC. He has also worked on numerous field development projects which entailed calculating reserves and determining drilling locations.

"We are very pleased with the results from our initial study into the Emery County leases. Utah is an important state for oil and gas production and we will continue exploring all expansion opportunities." stated Mr. Huang Yu, CEO.

About American Resources Exploration, Inc.

America Resources Exploration, Inc. is an oil and gas exploration and production company focused on the acquisition of properties in areas with significant oil reserves and drilling potential. The Company's growth strategy includes the acquisition of oil fields from distressed third parties at a substantial discount to value, and development of fields whose potential has not been fully maximized. For more information investors can visit www.america-resources.com

Forward-Looking Statements

This press release and the materials referenced herein include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give American Resources Exploration's current expectations or forecasts of future events. Such statements involve material risks and uncertainties, including but not limited to: whether newly drilled or newly acquired properties will produce at levels consistent with management's expectations; market conditions; whether we will experience equipment failures and, if they materialize, whether we will be able to fund repair work without materially impairing planned production levels or the availability of capital for further production increases; the ability of American Resources Exploration to fund the costs of new wells and to obtain financing from other sources for continued development; the costs of operations; delays, and any other difficulties related to producing oil; the ability of American Resources Exploration to integrate the newly producing assets; the ability to retain necessary skilled workers to operate the new producing wells; the price of oil; American Resources Exploration's ability to market and sell produced minerals; the risks and effects of legal and administrative proceedings and governmental regulation; future financial and operational results; competition; general economic conditions; and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements are set forth in our Form 10-K and the registrations statement for any offerings as filed with the SEC. American Resources Exploration undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. American Resources Exploration's production forecasts are dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Although American Resources believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.

Contact Information

  • Contact:
    Huang Yu
    CEO
    832-390-2273