CALGARY, ALBERTA--(Marketwired - April 30, 2014) -
Americas Petrogas (TSX VENTURE:BOE) ("Americas Petrogas" or the "Company") announces that the exploration period for Americas Petrogas' Totoral, Yerba Buena, Bajada Colorada blocks ("TYB blocks") (90% working interest) has been extended by two years to September 2015 by way of an official decree signed by the Neuquén Province in Argentina. This extension provides Americas Petrogas with operational and financial flexibility to continue exploration and delineation work, including the remaining work commitments on the TYB blocks, which include drilling two shallow wells on the TYB blocks.
In conjunction with the extension of the exploration period, the Company has returned approximately 1,510 square kilometers of TYB lands to the government. After the return of lands, the Company now has approximately 3,048 square kilometers gross (753,150 acres or 1,177 sections gross) relating to the TYB blocks, on which the Company holds a 90% working interest.
The Company engaged Ryder Scott, an independent petroleum engineering consulting firm, to provide an update effective March 31, 2014 (the "TYB Update") to the resource report dated effective June 30, 2013 prepared by Ryder Scott (the "2013 Resource Report"). For further information on the 2013 Resource Report please see the Company's press release dated August 22, 2013. The TYB update is effective as of March 31, 2014 and provides an estimate of the Company's prospective resources in respect of the TYB blocks, after giving effect to the return of lands. Ryder Scott estimates that there is now 1.72 billion boe of P50 Best Case Unrisked Prospective (Recoverable) Resources on the retained lands of the TYB blocks (69% oil and 31% gas), which is approximately 0.74 billion boe lower than the estimate of P50 Best Case Unrisked Prospective (Recoverable) Resources for the TYB blocks which was contained in the 2013 Resource Report.
Company-wide, the 2013 Resource Report and the TYB Update, in combination, now report 7.6 Billion boe of P50 Best Case Unrisked Prospective (Recoverable) Resources for Americas Petrogas.
The Company has drilled one Vaca Muerta Shale vertical exploration well (LHo.x-1) on the Totoral block. The well penetrated 666 feet of the primary target Vaca Muerta Formation with oil and gas shows through the whole shale column. The well was hydraulically stimulated and tested oil, confirming that the blocks and the basin in that area are capable of producing commercial oil and gas from shallow, easier-to-drill depths of the Vaca Muerta shale.
Mr. Barclay Hambrook, President and CEO of Americas Petrogas said, "After careful study, the Company has elected to return part of the TYB blocks to the government." Mr. Hambrook went on to say, "This extension provides us with the financial and operational flexibility to fulfill our commitments on the TYB blocks and provides additional time to plan our drilling program to continue testing our Vaca Muerta oil discovery and carry out exploration of the Los Molles shale."
Disclosure of Resources
The TYB Update has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGEH") and National Instrument 51- 101 - Standards for Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). The TYB Update provides a summary of the oil, liquids & natural gas resources associated with Americas Petrogas' TYB blocks in the Neuquén Basin, Argentina as of March 31, 2014, after giving effect to the return of lands to the government.
The TYB Update is based on certain factual data supplied by the Company and Ryder Scott's opinion of reasonable practice in the industry. The extent and character of ownership and all factual data pertaining to the Company's properties and contracts (except for certain information available in the public domain) were supplied by the Company to Ryder Scott and accepted without any further investigation. Ryder Scott accepted this data as presented and neither title searches nor field inspections were conducted. The recovery and resources estimates for Americas Petrogas' properties described herein are estimates only and there is no guarantee that the estimated resources will be recovered. The actual resources for Americas Petrogas' properties may be greater or less than those calculated.
Where applicable, natural gas has been converted to barrels of oil equivalent ("boe") based on 6 Mcf:1 boe. The boe rate is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalent at the well-head. Use of boe in isolation may be misleading.
Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Uncertainty Ranges are described by the COGEH as low, best, and high estimates for reserves and resources. The Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
Positive factors relevant to the resource estimates include the fact that minor production from the Vaca Muerta has occurred in conventional wells in many parts of the basin, the unconventional shale oil and shale gas potential of the Vaca Muerta has been the focus of significant appraisal drilling by multiple operators in the basin over the last several years, there is significant infrastructure that may be accessible in certain parts of the Neuquén Basin, logs and other data from historical wells which have penetrated the Vaca Muerta formation, and the fact that the Company has drilled, logged and acquired additional information in three wells targeting this unconventional potential in the Vaca Muerta; however, these wells are in various stages of evaluation. Negative factors and uncertainties associated with recovery of the Neuquén Basin resources include, but are not limited to, the lack of long-term shale oil and shale gas production history over the majority of the Neuquén Basin, lack of infrastructure in some locations, potential for variations in the quality of the Vaca Muerta formation where minimal well data currently exists, access to the substantial amount of capital which would be required to develop the resources, low commodity prices that would curtail the economics of development and the future performance of wells, regulatory approvals and/or changes to laws, access to the required services at the appropriate cost and topographic or surface restrictions. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development.
In the case of undiscovered resources or a subcategory of undiscovered resources, there is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. For undiscovered hydrocarbons, the term 'unrisked' means that no geologic or chance of discovery ("play risk") has been incorporated into the hydrocarbon volume estimates
The estimates of resources for individual properties may not reflect the same confidence level as estimates of resources for all properties, due to the effects of aggregation.
About Americas Petrogas Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has conventional and unconventional (shale and tight sands) oil and gas interests in numerous blocks in the Neuquen Basin of Argentina. Americas Petrogas has joint venture partners, including ExxonMobil and Apache, on various blocks in Argentina. For more information about Americas Petrogas, please visit www.americaspetrogas.com.
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
In particular, statements (express or implied) regarding the ability of the Company to fulfill work commitments on the TYB blocks, drilling activities on the TYB blocks, and concession fees related to the TYB blocks should all be viewed as forward looking statements. Statements relating to "reserves" or "resources" or "resource potential" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves and resource potential described exist in the quantities predicted or estimated, and can be profitably produced in the future. The presence of hydrocarbon shows is not necessarily indicative that hydrocarbons are capable of being successfully produced in commercial quantities. There is no assurance that future wells will be drilled on the TYB blocks or that if drilled, such wells will be successful.
There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this press release. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements, if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
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