Mitra Energy Inc.
TSX VENTURE : MTE

April 07, 2016 16:30 ET

Mitra Energy Inc. Provides Update on Contingent and Prospective Resources

KUALA LUMPUR, MALAYSIA--(Marketwired - April 7, 2016) -

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Mitra Energy Inc. (the "Company" or "Mitra") (TSX VENTURE:MTE) is pleased to provide an update on its Contingent and Prospective Resources.

Highlights

  • Revised Competent Person's Report ("CPR") completed by LR Senergy, effective date January 1, 2016.
  • Mitra's fields contain gross 2C Contingent Resources 1,148 billion cubic feet ("Bscf") of gas and 20 million barrels of associated liquids (totalling 212 million barrels of oil equivalent), for which Mitra has 2C Contingent Resources of 545 Bscf of gas and 11.4 million barrels of associated liquids (102 million barrels of oil equivalent), representing a 48% increase on the prior CPR.
  • Development Status for the Nam Du (Block 46/07 PSC) and U Minh (Block 51 PSC) gas fields in Vietnam has moved to 'Development Pending' classification, reflecting the progress towards commercialisation of these fields.
  • Exploration Best Case Prospective Resources net to Mitra of 3,840 Bscf gas and 237 million barrels of liquids (totalling 877 million barrels of oil equivalent), with a net Risked Pmean Prospective Resource of 960 Bscf gas and 60 million barrels of liquids (220 million barrels of oil equivalent).

Competent Person's Report

A Competent Person's Report ("CPR"), prepared in accordance with National Instrument 51-101 and the Canadian Oil and Gas Evaluation Handbook ("COGEH"), has been completed for the Company by Lloyds Register Senergy ("LR Senergy"), an independent reserves evaluator as defined in the COGEH, and has been filed under the Company's profile on SEDAR at www.sedar.com. The CPR was signed on April 5, 2016 and has an effective date of January 1, 2016. This CPR replaces that described in the Company's Filing Statement dated April 10, 2015, which was prepared as part of the RTO transaction with Petra Petroleum Inc.

Background

Mitra is engaged in the business of exploration and development of gas resources in Southeast Asia. Mitra's current asset portfolio comprises approximately 11.6 million acres of awarded acreage and consists of interests in one service contract ("Service Contract" or "SC") in the Philippines (Block SC 56), five production sharing contracts ("Production Sharing Contracts" or "PSCs") in Vietnam (Block 51, Block 46/07 and Block 45, Block 127 and Block MVHN/12KS) and four PSCs in Indonesia (NE Natuna, Bone, Sibaru and Titan).
Discovered Resources

Mitra has discovered resources in three gas fields in the shallow water Malay-Tho Chu Basin in Vietnam ('Nam Du' Field in Block 46/07 PSC plus 'Tho Chu' and 'U Minh' Fields in Block 51 PSC) and two deepwater gas fields in Philippines SC 56 ('Dabakan' and 'Palendag' Fields), see Table 1. Full descriptions of these fields can be found within the CPR.

The Contingent Resources for each field are shown in Table 2 on a gross, net working interest and net entitlement basis. The new CPR provides an estimated valuation for each field (on an NPV10 basis), along with an update on the Project Maturity and Chances of Development for each of the Company's gas fields (Table 3).

Table 1:

Mitra's Gas Fields

Asset Mitra Partner Field
Vietnam Block 51 70% operator PVEP (1) 30% Tho Chu
U Minh
Vietnam Block 46/07 70% operator PVEP (1) 30% Nam Du
Philippines SC 56 25% Total (2) 75% operator Dabakan
Palendag
(1) PVEP is the Vietnam Oil and Gas Group, the National Oil Company of Vietnam.
(2) Total E&P Philippines B.V.

Table 2:

Contingent Resources (1) (3) (5) - Gross and Net

Gross on Licence Net on Licence (2)
Low Best High Low Best High
Vietnam 51: Tho Chu (6) 98 372 948 69 260 663
Vietnam 51: U Minh (6) 12 64 91 8 45 64
Vietnam 46/07: Nam Du 70 138 173 49 97 121
Philippines SC 56: Dabakan 125 367 1,666 31 92 417
Philippines SC 56: Palendag 96 207 838 24 52 210
Total Gas(4); Bscf 401 1,148 3,716 181 545 1,475
Vietnam 51: Tho Chu (6) 3.0 13.4 36.5 2.1 9.4 25.6
Vietnam 51: U Minh (6) 0.1 0.7 1.1 0.1 0.5 0.8
Vietnam 46/07: Nam Du 0.0 0.0 0.0 0.0 0.0 0.0
Philippines SC 56: Dabakan 1.1 4.2 20.3 0.3 1.1 5.1
Philippines SC 56: Palendag 0.7 2.0 8.5 0.2 0.5 2.1
Total Liquids(4); MMstb 4.9 20.2 66.4 2.6 11.4 33.6
Total Oil Equivalent(7); MMboe 71.7 211.6 685.7 32.9 102.5 279.4
(1) Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations. Contingent Resources are the volumes that are technically recoverable from discovered petroleum initially in place under defined projects that are expected to become commercial upon resolution of contingencies.
(2) Net is net working interest to Mitra.
(3) Low, Best and High estimates are the deterministic equivalents of the P90 (90% probability), P50, and P10, respectively, for individual opportunities and equate to 1C, 2C and 3C for Contingent Resources. The best estimate (2C) resource is assessed for the development scenario and its production profile used in the economic evaluation, subject to an economic cut-off. The reported resource is sales gas and includes 8% COΓéé for Nam Du and U Minh and 20% COΓéé for Tho Chu. The Dabakan and Palendag sales gas assumes no COΓéé.
(4) Totals are by arithmetic summation and may not sum exactly due to rounding. Readers should give attention to the estimates of individual classes of resources and appreciate the differing probability of recovery associated with each class as explained in the text. The totals are unrisked.
(5) There is no certainty that it will be commercially viable to produce any portion of the contingent resources.
(6) Assumes Mitra holds a 70% working interest, following the withdrawal of Kuwait Foreign Petroleum Exploration Company from Block 51 PSC, Vietnam, which was effective on December 31, 2015, and which is currently pending government approval. There is no certainty that governmental approval will be obtained.
(7) A barrel of oil equivalent ("BOE") is determined by converting a volume of natural gas to barrels using the ratios of 6 thousand cubic feet ("Mcf") to one barrel. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Table 3:

Mitra Working Interest Post-Tax NPV10 and Development Status for Best Case Net Contingent Resources


Asset

Field
Working Interest Post-Tax NPV10
Economic Status

Chance of Development

Project
Maturity
Vietnam
Block 51
Tho Chu 157 Economic 52% Development Unclarified
U Minh 96 Economic 81% Development
Pending
Vietnam
Block 46/07
Nam Du 247 Economic 81% Development
Pending
Philippines
SC 56
Dabakan & Palendag 231 Economic 60% Development
On Hold

Exploration Highlights within the CPR

Vietnam Blocks 45, 46/07 and 51 PSCs

In addition to the discovered gas fields in the Vietnam Malay-Tho Chu Basin, a portfolio of eight exploration prospects has been catalogued. These represent low-risk follow on potential drilling targets once the key commercialisation milestones have been achieved for the discovered resources. The Best Case Prospective Resources from these prospects net to Mitra are 392 Bscf gas and 4.2 million barrels of liquids (totalling 69.6 million barrels of oil equivalent), with a net Risked Pmean Prospective Resource of 96 Bscf gas and 1 million barrels of liquids (17 million barrels of oil equivalent). This excludes prospective elements on the margins of the Tho Chu field that were too distant from the wells in that field to be counted as Contingent Resources. These Prospective Resources amount to 560 Bscf of gas plus 10 million barrels of liquids (392 Bscf plus 7 MMstb liquids net to Mitra).

Philippines Service Contract 56

In addition to the discovered gas fields on SC 56, a portfolio of exploration prospects has been identified. Total is planning an exploration well on the key Halcon prospect (expected to be drilled in 2017), for which Total will carry Mitra's 25% interest up to a gross well cost of US$75 million. The gross Prospective Resources in the CPR for the Halcon Prospect are 6,736 Bscf and 169 million barrels of condensates. The discovered and future gas resources are expected to be either sold via pipeline to Sabah (Malaysia) or to an LNG off-taker, probably via a floating liquefied natural gas ("LNG") facility to be operated by Total.

Indonesia Bone PSC

Mitra holds a 60% operating interest in the Bone PSC Block, offshore Sulawesi, in partnership with Azimuth Indonesia Limited. ("Azimuth"). The Block is undrilled, but is immediately adjacent to and on trend with proven gas accumulations on production in the onshore Sengkang PSC. The operator of Sengkang PSC, Energy World Corporation, is currently building a LNG liquefaction export facility on the coastline immediately adjacent to Bone PSC Block.

Mitra acquired around 1,200 line kilometers of new 2D seismic data during 2015, which were not available at the effective date of the prior CPR, but have now been evaluated by LR Senergy. The new CPR indicates five key drill-ready prospects in shallow water with a combined gross Pmean Prospective Resource of 2,515 Bscf of dry gas (1,509 Bscf net to Mitra's working interest). The chance of success for these five prospects ranges from 20-25%, giving a net Pmean risked Prospective Resource of 339 bcf. A number of additional prospects have also been interpreted by Mitra and noted by Senergy, but are less mature.

The Company is currently running a farmout process, with the aim of securing additional joint venture partners to fund the drilling of exploration wells on Bone PSC.

Vietnam Block 127 PSC

Mitra operates Block 127 PSC with 100% working interest. The block is located at the southern end of the Phu Khanh Basin, off the east coast of Vietnam. This deepwater frontier basin contains several minor discoveries of oil and gas that confirm the potential for hydrocarbon generation. Nearby acreage within the Phu Khanh Basin has been licenced by a number of players including ENI, Murphy Oil, Repsol and ONGC. A 2D seismic survey was completed by Mitra in 2012, resulting in the identification of three prospects and six leads in the block, which were included in the previous CPR. During 2015, Mitra acquired 3D seismic data over the key prospects, but processing of these data was not complete as of the effective date of the new CPR and so a revised evaluation of these prospects has not yet been undertaken by LR Senergy. Hence the new CPR shows the same resource potential for the block as the 2015 CPR, including the key Alpha prospect, which has Pmean Prospective Resources of 248 MMstb of oil. Mitra is commencing a farmout process to secure new partners to carry future drilling costs.

Block MVHN/12KS PSC

Mitra operates onshore Block MVHN/12KS PSC with 100% working interest. The block covers an onshore extension of the producing Song Hong Basin and was signed as a shale gas PSC in 2013, before being amended to include rights to cover all hydrocarbon resources, effective February 5, 2015. Mitra is evaluating both conventional and unconventional reservoir targets and expects to complete resource evaluation work later in 2016. As such, resources from Block MVHN/12KS PSC have not yet been evaluated by LR Senergy.

Paul Ebdale, CEO of Mitra, commented:

"We are pleased to see the progress Mitra is making across its assets being highlighted in this new CPR, particularly with regards to our gas fields in Vietnam. The increase in our net 2C Contingent Resources in the last 12 months to over 100 million barrels of oil equivalent and the advanced development status of these fields are further milestones in Mitra's pathway to realising the significant value in its gas discoveries."

Cautionary statements

This press release may contain forward-looking information and statements ("forward-looking information") within the meaning of applicable securities laws. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results or (as applicable). Although the Company believes that the expectations reflected in our forward-looking information is reasonable, our forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including without limitation: volatility in the market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital acquisitions; geological, technical, drilling and processing problems; fluctuations in foreign exchange or interest rates; health safety and environmental risks; stock market volatility; global economic events or conditions; and other factors, many of which are beyond the control of the Company. We caution that the forgoing list of risks and uncertainties is not exhaustive.

A barrel of oil equivalent ("BOE") is determined by converting a volume of natural gas to barrels using the ratios of 6 thousand cubic feet ("Mcf") to one barrel. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Neither 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.

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