Greenfields Petroleum Corporation

Greenfields Petroleum Corporation

November 08, 2011 22:01 ET

Greenfields Petroleum Corporation Reports Reserves Net to the Company's Interest

CALGARY, ALBERTA--(Marketwire - Nov. 8, 2011) -


Greenfields Petroleum Corporation (the "Company" or "Greenfields") (TSX VENTURE:GNF), an independent exploration and production company with producing assets in Azerbaijan, announces that it has received an updated reserve report that it commissioned from GLJ Petroleum Consultants ("GLJ") of Calgary, Alberta to update the Company's reserves as at an effective date of September 30, 2011 (the "GLJ Report"). Greenfields participates in the Bahar Exploration, Rehabilitation, Development and Production Sharing Agreement ("ERDPSA") through its 33.33%-owned joint venture, Bahar Energy Limited, and its operating subsidiary, Bahar Energy Operating Company Limited.

Greenfields recently completed updating its reserve report information as a result of significant "below ground" mapping in two fields currently under development located in the ERDPSA in offshore South Caspian Sea. Based on the GLJ Report, total proved (developed and undeveloped: "P1") reserves are estimated to be 8.62 million boe net, probable ("P2") reserves are estimated to be 2.88 million boe net and possible ("P3") reserves are estimated to be 3.12 million boe net. The combined total of proved, probable and possible (P1+P2+P3) net reserves is estimated by the GLJ Report to be 14.62 million boe. The GLJ Report also identified contingent resources projected net to the Company of 15.1 million boe (previous reserve assessments had not quantified this additional potential in these two fields).

The net present value of the proved reserves alone and the total value of proved plus probable reserves (combined), both discounted at 10% after income taxes, are estimated in the GLJ Report to be $92.4 million and $137.46 million, respectively. The net present value of the total proved, probable and possible reserves, discounted at 10% after income taxes, are estimated in the GLJ Report to be valued at $223.06 million.

Technical work continues with 2D and 3D seismic programs which are currently being shot. Recompletion work is also scheduled and awaits the arrival of equipment which is expected in the last two months of 2011. The results of the seismic programs and recompletion work may affect the results of the upcoming 2011 year-end report.

Greenfields currently waits on the arrival of two, new workover rigs (one to arrive late this year, a second to arrive in early 2012) and anticipates the arrival and deployment of 2 drilling rigs next year to begin (i) an 82-well recompletion program to develop behind pipe reserves in existing wellbores; and (ii) an 83-well drilling program of development wells in the currently approved ERDPSA development program. Funds raised through Greenfields' IPO last November 2010, together with cash flows from existing production are expected to be sufficient to fund the Company's net share of development costs (estimated to be about $180.4 million net to Greenfields' interest) for the proposed work programs which will support the development program of the P2 reserves.

Reserves and Valuation Summary

Crude Oil & Liquids Natural Gas Oil Equivalent Net Present Values(4)(10 %)
Reserves Category Gross(1 ) Net(2 ) Gross(1 ) Net(2 ) Gross(1 ) Net(2 ) Net(2)US$
(Mbbls ) (Mbbls ) (MMcf ) (MMcf ) (MBOE ) (MBOE ) (Million )
Developed Producing 920 224 22,298 5,478 4,637 1,137 5.28
Developed Non-Producing 4,056 874 63,421 13,202 14,626 3,075 26.55
Undeveloped 15,905 2,689 66,941 10,318 27,062 4,409 60.62
Total Proved 20,881 3,788 152,660 28,998 46,324 8,620 92.45
Probable 8,960 1,159 73,702 10,345 21,244 2,884 45.01
Total Proved + Probable 29,841 4,947 226,362 39,343 67,568 11,504 137.46
Possible 22,605 2,873 30,808 1,476 27,740 3,119 85.59
52,447 7,820 257,170 40,819 95,308 14,623 223.05
Contingent Resources(5)
High Estimate
72,185 NA 164,129 NA 99,539 NA NA


(1) "Gross Reserves" are project reserves before the deduction of Bahar Energy partner interests, the interest of SOA and other amounts pursuant to the ERDPSA.

(2) "Net Reserves" are the Corporation's 33.33% share of Bahar Energy's reserves pursuant to the ERDPSA after the deduction of the interest of SOA and other deductions.

(3) GLJ Report with effective date of September 30, 2011.

(4) Income taxes are paid by SOCAR, thus the NPV amounts are, effectively, "after 'deducting' any income taxes in Azerbaijan".

(5) There is no certainty that these contingent resources will be commercially viable to produce.

The table above is part of a corporate presentation of Greenfields. The full presentation can be found on the Company's website.

About Greenfields Petroleum Corporation

Greenfields is an oil and natural gas corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at

Forward Looking Statements

The Company's press releases contain forward-looking information that involve substantial known and unknown risks and uncertainties, most of which are beyond the control of Greenfields, including, without limitation, those listed under the headings "Risk Factors" in Greenfield's Annual Information Form and in the Company's Management's Discussion & Analysis which may be viewed on Forward-looking information in this press release may include, but is not limited to, information concerning its future operations.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information. Accordingly, prospective investors should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, other than as required by applicable securities laws, Greenfields does not assume any obligation to update or revise them to reflect new events or circumstances.

Notes to Oil and Gas Disclosures:

The Company's petroleum and natural gas reserves (the "reserves") were independently evaluated by GLJ in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGEH") reserves definitions and evaluation practices and procedures as specified by National Instrument 51-101 ("NI 51-101"). The evaluation uses GLJ's forecast prices and costs at October 1, 2011.

The term "boe" can be misleading, particularly if used in isolation. A barrel of oil equivalent ("boe") conversion ratio of 6 thousand cubic feet ("mcf") of gas to 1 barrel ("bbl") of crude oil is based on an energy content conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Estimated net present values do not represent fair market value.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information