NuLoch Resources Inc.
TSX VENTURE : NLR.A
TSX VENTURE : NLR.B

NuLoch Resources Inc.

March 24, 2009 19:41 ET

NuLoch Resources Announces Year-End Reserves of 2.3 MMboe

CALGARY, ALBERTA--(Marketwire - March 24, 2009) - NuLoch Resources Inc. (TSX VENTURE:NLR.A)(TSX VENTURE:NLR.B) retained AJM Petroleum Consultants (AJM) to conduct the evaluation of the Company's petroleum and natural gas reserves effective as at December 31, 2008. AJM's report, dated March 24, 2009 was compiled pursuant to the guidelines of National Instrument 51-101.

Discoveries and extensions of 311 Mboe exceeded 2008 production of 191 Mboe by 1.6 times but net negative revisions to reserves recorded in prior years totalled 461 Mboe. The Company reports a 13 percent decline in its proved and probable reserves volumes and values at December 31, 2008 compared to a year ago.

NuLoch has 30,779,695 Class A common shares and 652,500 Class B common shares outstanding. The Company's working capital deficiency, including bank debt, totalled $4.4 million at December 31, 2008 (unaudited).



Company Gross Reserves as at December 31, 2008
----------------------------------------------------------------------------
Light &
Medium Natural
Oil Gas NGL Total
(Mbbls) (MMcf) (Mbbls) (Mboe)
---------------------------------------
Proved producing 148 4,245 15 871
Proved non-producing 11 445 2 87
Proved undeveloped - 3,680 - 613
---------------------------------------
Total proved 159 8,370 17 1,571
Probable 54 4,106 5 743
---------------------------------------
Total proved and probable 213 12,476 22 2,314
---------------------------------------
---------------------------------------


Forecast Net Revenue as at December 31, 2008
----------------------------------------------------------------------------
Before Income Tax
---------------------------------
$000s, discounted at 0% 5% 10% 15%
---------------------------------

Proved producing 21,991 18,068 15,414 13,512
Proved non-producing 2,305 1,959 1,688 1,472
Proved undeveloped 12,368 7,098 4,093 2,305
---------------------------------
Total proved 36,664 27,125 21,195 17,289
Probable 27,009 14,193 8,734 5,986
---------------------------------
Total proved and probable 63,673 41,318 29,929 23,275
---------------------------------
---------------------------------



After Income Tax
---------------------------------
$000s, discounted at 0% 5% 10% 15%
---------------------------------

Proved producing 21,137 17,541 15,070 13,278
Proved non-producing 1,676 1,454 1,279 1,136
Proved undeveloped 8,983 4,974 2,689 1,337
---------------------------------
Total proved 31,796 23,969 19,038 15,751
Probable 19,820 10,411 6,428 4,432
---------------------------------
Total proved and probable 51,616 34,380 25,466 20,183
---------------------------------
---------------------------------



Summary Analysis of Changes in Reserves (Company Working Interest)
----------------------------------------------------------------------------
(Mboe) Value
--------------------------- Before Tax
Proved Probable Total 10% DCF
---------------------------------------
December 31, 2007 1,657 998 2,655 $34,427
Discoveries and extensions 277 34 311
Technical revisions (172) (289) (461)
Production (191) - (191)
---------------------------------------
December 31, 2008 1,571 743 2,314 $29,929
---------------------------------------
---------------------------------------
Percentage changes
Discoveries and extensions 17% 3% 12%
Technical revisions (10)% (29)% (17)%
Production (12)% - (7)%
---------------------------------------
Overall change (5)% (26)% (13)% (13)%
---------------------------------------
---------------------------------------



Reserve Reconciliation (Company Working Interest)
----------------------------------------------------------------------------
Light &
Medium Natural
Oil Gas NGL Total
(Mbbls) (MMcf) (Mbbls) (Mboe)
---------------------------------------
Proved
December 31, 2007 153 8,902 21 1,657
Discoveries 40 1,310 12 270
Extensions 7 - - 7
Technical revisions 26 (1,125) (12) (172)
Production (67) (717) (4) (191)
---------------------------------------
December 31, 2008 159 8,370 17 1,571

Probable
December 31, 2007 84 5,341 23 998
Discoveries 11 136 (3) 31
Extensions 3 - - 3
Technical revisions (44) (1,371) (15) (289)
Production - - - -
---------------------------------------
December 31, 2008 54 4,106 5 743

Proved and probable
December 31, 2007 237 14,243 44 2,655
Discoveries 51 1,446 9 301
Extensions 10 - - 10
Technical revisions (18) (2,496) (27) (461)
Production (67) (717) (4) (191)
---------------------------------------
December 31, 2008 213 12,476 22 2,314
---------------------------------------
---------------------------------------



Reserve Life Index
----------------------------------------------------------------------------
Production (2008 average boe/d) 522

Proved reserves (Mboe) 1,571
Proved reserve life index (years) 8.2

Proved plus probable reserves (Mboe) 2,314
Proved plus probable reserve life index (years) 12.1


Future prices used in the forecast of net revenue are based on those estimated by AJM as at December 31, 2008. The first five years of forecast prices for certain benchmarks are summarized below:



Five-Year Forecast of Future Prices
----------------------------------------------------------------------------
Oil Oil Natural gas
WTI Edmonton AECO average
Year ($US/bbl) ($CDN/bbl) ($CDN/Mcf)
----- ------------------------------------------
2009 55.00 65.40 7.00
2010 76.50 87.20 8.05
2011 88.45 96.50 8.20
2012 100.80 104.30 9.00
2013 108.25 112.05 9.75

Wells Drilled in 2008
----------------------------------------------------------------------------
The Company drilled 7 (4.8 net) wells during 2008 as part of its $16
million capital program. Three (2.2 net) of these locations were drilled to
test the potential for oil in new core areas. While none of these wells
resulted in economic success, the Company plans to drill additional
locations in each of these areas from the leads they provided.


Natural Success
Oil gas Dry Total ratio
----------------------------------------------------------
Gross 2 3 2 7
Net 1.7 2.2 0.9 4.8 81%


The most notable well in 2008 was drilled at Tableland, Saskatchewan. The well has a high water cut believed induced by a fracture stimulation that went out of zone and, consequently, only nominal reserves of crude oil have been assigned to this well. Through this operation, the Company has earned working interests ranging from 35% to 50% in the balance of the 51 section farm-in block. Late in 2008, NuLoch and its partner acquired additional Crown lands at Tableland that directly offset its existing position.

Finding and Development (F&D) Costs

F&D costs are derived by dividing all costs incurred in exploratory, development and acquisition activities in a period by the proved and proved plus probable reserves added in that period. These F&D costs are further adjusted to include any future development activity estimated to be required to place the reported reserves on production.

For 2008, F&D costs were $55.52 per proved boe and $48.36 per proved plus probable boe before including revisions to prior year reserve estimates. The corresponding values, net of reserve volume revisions, are presented in the table below.

The Company has not yet released its audited financial statements for the year ended December 31, 2008. Additions to property and equipment in 2008 are estimated at $16,234,000 but are subject to audit and may be revised as necessary.



F&D Costs
For the periods from inception in 2005 to December 31, 2008
(Millions)
----------------------------------------------------------------------------
Rolling
3 Year Cumu-
2005 2006 2007 2008 2008 lative
-----------------------------------------------
Additions to property
and equipment $11.5 $11.6 $ 7.6 $16.2 $35.4 $46.9

Add (deduct):
Change in asset retirement
obligations (0.4) - (0.1) - (0.1) (0.5)
Office equipment (0.1) - - - - (0.1)
Change in future
development costs
- Proved reserves 10.4 (2.0) 0.4 (0.8) (2.4) 8.0
- Probable reserves - - 0.3 (0.3) - -
-----------------------------------------------
$21.4 $ 9.5 $ 8.3 $15.1 $32.9 $54.3
-----------------------------------------------
-----------------------------------------------

F&D costs per boe
- Proved $16.13 $40.90 $25.02 $146.64 $50.14 $ 27.38
- Proved plus probable $10.77 $33.50 $13.75 (1) $44.50 $ 19.91

(1) 2008 F&D costs not applicable due to negative technical revisions.


ADVISORIES

Reserves Disclosure

Reserves information presented relates to NuLoch's working interest share of reserves and present values as at December 31, 2008. The reserves are reported using AJM's forecast prices and costs. Complete reserves disclosure will be included in the Company's Form 51-101 filing.

Use of Barrels of Oil Equivalent (boe)

Disclosure provided herein in respect of boe units may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf of natural gas to 1 bbl of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and may not represent a value equivalency at the wellhead.

Use of Estimates

The net present value of future net revenue attributable to the Company's reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, development costs, other income, future capital expenditures, and well abandonment costs for only those wells assigned reserves by AJM. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to effects of aggregation. Actual recoveries may be greater than or less than the estimates provided herein and there is no guarantee that the estimated reserves will be recovered. It should not be assumed that the values of future net revenue attributable to the Company's reserves represent the fair market value of those reserves.

Calculation of Finding and Development Costs

Finding costs per boe of reserves added are a rough measure of the average per unit costs of finding and developing petroleum and natural gas reserves.

The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

Forward-Looking Statements

Certain statements in this document or incorporated herein by reference constitute "forward-looking statements". These forward-looking statements can generally be identified as such because of the context of the statements, including words indicating that the Company "believes", "anticipates", "expects", "plans" or words of a similar nature. 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, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions which will, among other things, impact demand for and market prices of the Company's products; industry capacity; the ability of the Company to implement its business strategy, including exploration and development activities; the ability of the Company to complete its capital programs; successful negotiations with bankers and other third parties; the success of exploration and development activities; production levels; government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations); asset retirement obligations; and other circumstances affecting revenues and expenses.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • NuLoch Resources Inc.
    R. Glenn Dawson
    President and CEO
    (403) 920-0455
    (403) 920-0457 (FAX)
    or
    NuLoch Resources Inc.
    2200, 444 - 5th Avenue SW
    Calgary, Alberta T2P 2T8
    Email: nuloch@nuloch.ca