Eaglewood Energy Inc.
TSX VENTURE : EWD

Eaglewood Energy Inc.

March 14, 2012 09:00 ET

Eaglewood Announces Ubuntu Resource Update

CALGARY, ALBERTA--(Marketwire - March 14, 2012) - Eaglewood Energy Inc. (TSX VENTURE:EWD).

Eaglewood Energy Inc. (the "Corporation") is pleased to announce an update to the estimated resources on its Ubuntu Discovery in Papua New Guinea, following the acquisition of infill seismic over the Ubuntu structure in December last year. Gaffney, Cline & Associates ("GCA"), an independent qualified reserves evaluator, prepared the update for the Corporation dated effective March 1, 2012. The resource estimates from GCA are prepared in compliance with National Instrument 51-101 and the COGE Handbook.

The GCA update reports a Mean Estimate of natural gas initially in place of 96.2 BCF, and a mean estimate of natural gas liquids initially in place of 5.28 MMbbl. Eaglewood have used a 6:1 conversion ratio to convert natural gas liquids to natural gas equivalent, with the estimated mean natural gas equivalent initially in place of 127.9 BCFE.

The updated resource estimate indicates the following:

  • The Contingent Resource of the 1C category level on a 100% basis has increased from 18.9 BCF of natural gas and 0.69 MMbbl of natural gas liquids to 28.6 BCF of natural gas and 1.00 MMbbl of natural gas liquids, an increase of 51% for natural gas and 45% for natural gas liquid; and
  • The Contingent Resource of the 2C category level on a 100% basis has increased from 35.7 BCF of natural gas and 1.47 MMbbl of natural gas liquids to 43.7 BCF of natural gas and 1.82 MMbbl of natural gas liquids, an increase of 22% for natural gas and 24% for natural gas liquid.

The reported increase in the Contingent Resource for the 1C and 2C categories is attributable to better definition of the structural framework of the Ubuntu discovery following acquisition of infill seismic in December 2011.

A breakdown in the increase in Gas Initially In Place, Condensate Initially In Place and Contingent Resources for the field compared to April 2011 is outlined in the tables below:

GIIP (BCF) Contingent Gas
Resource (BCF)
P90 P50 P10 Pmean 1C 2C 3C
Apr.-11 28.6 53.9 167.2 85.6 18.9 35.7 111.5
Mar.-12 43.3 65.5 167.4 96.2 28.6 43.7 111.1
Increase 51 % 22 % 0 % 12 % 51 % 22 % 0 %
CIIP (MMBbl) Contingent Condensate
Resource (MMBbl)
P90 P50 P10 Pmean 1C 2C 3C
Apr.-11 1.53 2.95 9.21 4.70 0.69 1.47 4.64
Mar.-12 2.27 3.62 9.28 5.28 1.00 1.82 4.73
Increase 48 % 23 % 1 % 12 % 45 % 24 % 2 %

There are a number of significant factors relevant to the estimates provided above, including, but not limited to:

  1. Definition of a Field Development Plan (FDP) - current Recovery Factors are notional and based on a gas blowdown development scenario.
  2. Review of natural gas and natural gas liquids recovery factors once an FDP is decided.

There are also a number of contingencies which preclude the estimated resources from being classified as reserves. Such contingencies include, but are not limited to, the development plan envisaged by the Corporation and additional appraisal drilling.

CEO Brad Hurtubise commented "We are pleased to have the independent engineering update to help clarify the size of the resources in the Ubuntu Discovery. In our opinion, the increase in C1 and C2 volumes, along with the very positive results of the offsetting wells in PRL 21 which the Operator has announced are on the high side of expectations, support our belief that Ubuntu will be commercialised and clearly de-risks our other prospects in the immediate area. This is especially true in the context of the recently announced transaction between Talisman and Mitsubishi"

Reader Advisory

"Contingent resources" means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage.

"Natural gas initially in place" and "natural gas liquids initially in place" mean those quantities of natural gas or natural gas liquids that are estimated to exist originally in naturally occurring accumulations. It includes that quantity of natural gas or natural gas liquids that are estimated, as of a given date, to be contained in known accumulations, prior to production.

"1C (Low Estimate or P90)" means a conservative estimate of the quantity that will actually be recovered from the accumulation. It is likely that the actual remaining quantities discovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the low estimate.

"2C (Best Estimate or P50)" means the best estimate of the quantity that will actually be recovered from the accumulation. 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 that the quantities actually recovered will equal or exceed the best estimate.

"3C (High Estimate or P10)" means an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability that the quantities actually recovered will equal or exceed the high estimate.

"Mean Estimate" represents the statistical mean of the Low Estimate, the Best Estimate and the High Estimate using probabilistic methods.

No proved, probable or possible reserves have been assigned to the Ubuntu well at this time. Undiscovered resources are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered. Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. Readers are also advised that there is no certainty that it will be commercially viable to produce any portion of the resources.

BCFEs may be misleading, particularly if used in isolation. A BCFE conversion ratio of 1bbl: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements

Certain statements contained in this press release, such as statements relating to resource estimates, may constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, may be forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement.

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