Berens Energy Ltd.

March 02, 2007 23:59 ET

Berens Energy Ltd. - Releases December 31, 2006 Reserve Information and Operating Update

CALGARY, ALBERTA--(Marketwire - March 2, 2007) -

NOT FOR DISTRIBUTION INTO THE UNITED STATES OF AMERICA OR TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Berens Energy Ltd. ("Berens") (TSX:BEN) is pleased to report information on its December 31, 2006 reserves evaluation and provide an update on recent drilling.

RESERVES

Berens' oil and gas reserves were independently evaluated by GLJ
Petroleum Consultants ("GLJ"). The evaluation was completed using the reserves definitions in the Canadian Oil and Gas Evaluation Handbook and the Canadian Securities Administrators National Instrument 51-101 ("NI 51-101"). Total working interest proved plus probable reserves as at December 31, 2006 were 7,765,000 boe comprised of 1,487,000 barrels of oil and natural gas liquids and 37,673 million cubic feet of natural gas. Total proved plus probable reserves grew 224 percent from December 31, 2005 to December 31, 2006. On a per share basis proved plus probable reserves grew 99 percent from 41.9 boe/1000 shares outstanding to 83.5 boe/1000 shares outstanding. Proved plus probable reserves growth came equally from the exploration and development program which added 3.3 million boe and the acquisition of Berland Exploration Ltd. in January 2006 which added 3.3 million boe. The following table summarizes Berens' working interest reserves on a gross basis (before deduction for royalties) as at December 31, 2006 using forecast prices and costs based on the GLJ January 1, 2007 price forecast.



SUMMARY OF OIL AND GAS RESERVES(1)

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WORKING INTEREST
RESERVES OIL and LIQUIDS NATURAL GAS
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2006 2005 Percent 2006 2005 Percent
RESERVES CATEGORY (Mbbl) (Mbbl) Change (MMcf) (MMcf) Change
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PROVED
Developed
Producing 743 180 +313% 18,770 6,819 +175%
Developed
Non-Producing 148 25 +492% 4,266 1,460 +192%
Undeveloped 100 0 - 3,381 474 +613%
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TOTAL PROVED 991 205 +383% 26,417 8,753 +202%
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PROBABLE 496 61 +713% 11,256 4,029 +179%
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TOTAL PROVED PLUS
PROBABLE 1,487 266 +459% 37,673 12,782 +195%
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BEFORE TAX
WORKING INTEREST RESERVES BOE PRESENT VALUE(1)
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RESERVES CATEGORY 2006 2005 Percent 8% 10%
(Mbbl) (Mbbl) Change ($000's) ($000's)
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PROVED
Developed Producing 3,871 1,316 +194% 73,823 69,432
Developed Non-Producing 858 269 +219% 14,977 14,013
Undeveloped 664 79 +740% 4,626 3,731
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TOTAL PROVED 5,393 1,664 +224% 93,427 87,176
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PROBABLE 2,372 732 +224% 35,174 31,074
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TOTAL PROVED PLUS PROBABLE 7,765 2,396 +224% 128,601 118,249
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(1) It should not be assumed that the present values of estimated
future net cash flows shown above are representative of the fair market
value of the reserves. There is no assurance that such price and cost
assumptions will be attained and variances could be material. The
recovery and reserves estimates of crude oil, NGL and natural gas
reserves provided herein are estimates only and there is no guarantee
that the estimated reserves will be recovered. Actual crude oil,
natural gas and NGL reserves may be greater than or less than the
estimates provided herein.


Oil and liquids represent 19 percent of December 31, 2006 reserves, up
from 11 percent at December 31, 2005 as the majority of the reserves added
through acquisition and drilling in 2006 have been liquids rich natural gas
reserves in Pembina and the Deep Basin. In addition to the value summarized
above, Berens has access to over 145,000 net undeveloped acres concentrated in
its four core areas.

The following table reconciles the reserve additions from capital spending, acquisitions and revisions to opening estimates.



RECONCILIATION OF
COMPANY INTEREST RESERVES BY
BARREL OF OIL EQUIVALENT
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BOE
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Proved
Plus
FACTORS Proved Probable
(Mboe) (Mboe)
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December 31, 2005 1,664 2,396

Discoveries 390 499
Extensions 1,817 2,752
Infill drilling - -
Improved recovery 15 20
Technical revisions 200 21
Acquisitions 2,584 3,364
Dispositions (23) (33)
Production(1) (1,254) (1,254)
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December 31, 2006 5,393 7,765
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(1) Unaudited


Berens estimates capital spending of $55.7 million in 2006 and aggregate acquisition capital of $104.1 million ($102.7 million for the Berland acquisition and $1.4 million for a minor acquisition). Net future capital as at December 31, 2006 is estimated at $14.0 million.

All calculations converting natural gas to crude oil equivalent have been made using a ratio of six thousand cubic feet ("mcf") of natural gas to one barrel of crude oil equivalent. Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

OPERATIONS

In the fourth quarter of 2006 Berens drilled five (4.7 net) successful wells on six (5.3 net) attempts in Lanfine and went five (2.9 net) for five (2.9 net) in Pembina for an overall success ratio of 93 percent. Two additional successful small interest wells (0.1 net) were also drilled in Pembina by partners in the fourth quarter of 2006. Overall for 2006 Berens had 39 (25.2 net) successful wells on 50 (29.3 net) wells drilled for an overall net success rate of 86 percent. December 2006 average production was 3,556 boed with significant tie-in activity under way at year end.

In January and February 2007 there have been three successful wells (1.9 net) on three attempts in Pembina and two (0.8 net) for three in the Deep Basin. In Marten Hills during January and February, 2007 seven wells (2.6 net) have been drilled with four (1.5 net) being successful. So far in 2007 our overall success rate is 70 percent. In the remainder of the first quarter of 2007 we expect to drill four more wells, two in Pembina and two in the Deep Basin with the rest of our activity focused on pipelining and connecting our fourth quarter 2006 and early 2007 wells prior to spring break-up. The Berens' technical team continues to add future drilling locations on its extensive undeveloped land position.

Based on the fourth quarter of 2006 drilling success, the Company's operating bank facility has recently been raised to $65 million and Berens remains on track with its previously announced $45 million capital budget for 2007 and an estimated average production volume for 2007 of 4,200 boed.

Caution Regarding Forward Looking Information

This press release contains forward looking information within the meaning of applicable securities laws. Forward looking statements may include estimates, plans, expectations, forecasts, guidance or other statements that are not statements of fact. Forward looking information in this Press Release includes, but is not limited to, statements with respect to capital expenditures and related allocations, production volumes, production mix and commodity prices.

Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to Berens concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: crude oil and natural gas price volatility, exchange rate and interest rate fluctuations, availability of services and supplies, market competition, uncertainties in the estimates of reserves, the timing of development expenditures, production levels and the timing of achieving such levels, the Company's ability to replace and increase oil and gas reserves, the sources and adequacy of funding for capital investments, future growth prospects and current and expected financial requirements of the Company, the cost of future abandonment and site restoration, the Company's ability to enter into or renew leases, the Company's ability to secure adequate product transportation, changes in environmental and other regulations and general economic conditions.

The forward-looking statements contained in this press release are made as of the date of this press release, and Berens does not undertake any obligation to up-date publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. This cautionary statement expressly qualifies the forward-looking statements contained in this press release.

Contact Information

  • Berens Energy Ltd.
    Dell P. Chapman
    V.P. Finance & CFO
    (403) 303-3267

    or

    Berens Energy Ltd.
    Robert D. Steele
    Chief Executive Officer
    (403) 303-3264