Odyssey Petroleum Corp.
TSX VENTURE : ODE

Odyssey Petroleum Corp.

October 25, 2005 06:00 ET

Odyssey Petroleum Corp.: NI 51-101 Reserve Report Received on Pelahatchie Field, Mississippi

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 25, 2005) - Odyssey Petroleum Corp. (TSX VENTURE:ODE) (the "Company" or "ODE") announces that it has received an evaluation effective October 1, 2005 of the oil and gas reserves attributable to the interests of the Company in the Pelahatchie Field, Rankin County Mississippi, in the form of a Reserve and Economic Report dated October 12, 2005, as prepared by Fletcher Lewis Engineering Inc. (the "Report"). Excerpts from the Report are as follows.

The present worth values of the net production revenue are presented before income taxes. The values are in U.S. dollars after deduction of all royalties, mineral taxes, operating costs and estimated future capital. All properties were evaluated to a 100% Working Interest and a 75% Net Revenue Interest. All of the evaluated wells, with the exception of the proposed Norphlet Unit #17 and Smackover #1-25 and #1-26 have all or substantially all of the available acreage leased.

The reserve summaries are as follows:



CONSTANT PRICES AND EXPENSES
NET NET NET PRESENT VALUE OF NET PRODUCTION
OIL GAS DISCOUNTED
(BBLS) (MCF) 0% 5% 10%
PDP 76,114 0 2,636,569 2,303,299 2,045,589
PDN 145,534 121,909 8,139,662 6,111,395 4,761,950
PUD 20,150,510 43,341,637 1,402,850,964 871,656,513 583,374,902
PROB 9,712,532 35,899,016 783,837,831 471,212,555 305,735,810
POSS 3,687,839 14,667,839 310,013,760 182,123,712 118,063,845
SUMM-
ARY 33,772,529 94,030,401 2,507,478,786 1,536,407,474 1,013,982,096


CONSTANT PRICES AND EXPENSES
NET PRESENT VALUE OF NET PRODUCTION
DISCOUNTED
15% 20%
PDP 1,841,793 1,677,395
PDN 3,826,551 3,154,732
PUD 413,305,283 305,883,782
PROB 209,956,238 150,572,879
POSS 79,119,316 55,114,483
SUMM-
ARY 708,058,181 516,403,271

PDP equals Proven Developed and Producing
PDN equals Proven Developed Non-Producing
PUD equals Proven Undeveloped
PROB equals Probable
POSS equals Possible

FORECAST PRICES AND ESCALATED EXPENSES
NET NET NET PRESENT VALUE OF NET PRODUCTION
OIL GAS DISCOUNTED
(BBLS) (MCF) 0% 5% 10%
PDP 64,794 0 1,280,349 1,159,455 1,060,352
PDN 143,364 119,739 5,110,753 3,865,352 3,025,848
PUD 20,150,510 43,341,637 914,861,127 557,319,307 364,733,023
PROB 9,712,532 35,899,016 489,603,627 288,329,381 182,716,222
POSS 3,687,839 14,667,839 194,775,109 115,672,727 73,156,235
SUMM-
ARY 33,759,039 94,028,231 1,605,630,965 966,346,221 624,691,221


FORECAST PRICES AND ESCALATED EXPENSES
NET PRESENT VALUE OF NET PRODUCTION
DISCOUNTED
15% 20%
PDP 977,956 908,558
PDN 2,438,543 2,014,007
PUD 252,220,412 181,941,013
PROB 122,351,259 85,463,620
POSS 48,563,151 33,502,383
SUMM-
ARY 426,551,321 303,829,581


The present worth values of the net production revenue are also presented after income taxes. The values are in U.S. dollars after deduction of all royalties, mineral taxes, operating costs and estimated future capital. All properties were evaluated to a 100% Working Interest and a 75% Net Revenue Interest. Odyssey Petroleum Corp. has a $16,000,000.00 tax loss carry forward and as a result with that and the heavy investment, no taxes were subtracted until 2008. A review of the net income for the constant economic case using the U.S. tax rate schedule shows that the tax rate would be 35% for the years 2008 through 2028, 38% for 2029 and 34% for the remainder of the economic life. A review of the net income for the forecast economic case using the U.S. tax rate schedule shows that the tax rate would be 35% for the years 2008 through 2028 and 34% for the remainder of the economic life.

The after tax summaries are as follows:



CONSTANT PRICES AND EXPENSES
AFTER INCOME TAX
NET NET NET PRESENT VALUE OF NET PRODUCTION
OIL GAS DISCOUNTED
(BBLS) (MCF) 0% 5% 10%
PDP 76,114 0 2,164,944 1,923,322 1,739,013
PDN 145,534 121,909 5,694,151 4,349,505 3,448,144
PUD 20,150,510 43,341,637 914,681,903 569,630,878 381,558,354
PROB 9,712,532 35,899,016 508,910,836 306,373,023 198,486,229
POSS 3,687,839 14,667,839 210,878,657 126,566,028 80,681,629
SUMM-
ARY 33,772,529 94,030,401 1,642,330,491 1,008,845,756 665,913,369


CONSTANT PRICES AND EXPENSES
AFTER INCOME TAX
NET PRESENT VALUE OF NET PRODUCTION
DISCOUNTED
15% 20%
PDP 1,588,707 1,465,719
PDN 2,818,281 2,361,972
PUD 270,340,660 199,987,261
PROB 135,933,227 97,151,313
POSS 53,909,735 37,402,224
SUMM-
ARY 464,590,610 338,368,488


FORECAST PRICES AND ESCALATED EXPENSES
AFTER INCOME TAX
NET NET NET PRESENT VALUE OF NET PRODUCTION
OIL GAS DISCOUNTED
(BBLS) (MCF) 0% 5% 10%
PDP 64,794 0 1,108,438 1,016,548 940,210
PDN 143,364 119,739 3,583,232 2,756,972 2,195,694
PUD 20,150,510 43,341,637 601,399,776 368,137,647 241,692,520
PROB 9,712,532 35,899,016 317,026,660 186,501,138 117,634,778
POSS 3,687,839 14,667,839 126,504,155 75,330,680 47,588,892
SUMM-
ARY 33,759,039 94,028,231 1,049,622,261 633,742,985 410,052,095


FORECAST PRICES AND ESCALATED EXPENSES
AFTER INCOME TAX
NET PRESENT VALUE OF NET PRODUCTION
DISCOUNTED
15% 20%
PDP 875,928 821,124
PDN 1,799,754 1,510,985
PUD 167,455,330 120,880,356
PROB 78,231,688 54,180,861
POSS 31,513,294 21,677,655
SUMM-
ARY 279,875,993 199,070,981


RESERVE CATEGORIES

The Report was prepared Fletcher Lewis engineering, Inc., a qualified reserves evaluator in accordance with National Instrument 51-101 (NI 51-101) and the standards set out in the Canadian Oil and Gas Evaluation Handbook. The reserves estimates were functions of engineering judgment and interpretation, based on data available as of the effective date of the Report. Mr. Fletcher Lewis, P.E., the author of the Report, has stated that there are always inherent risks in estimates of oil and gas reserves and values as few of the factors involved are known with certainty. Events subsequent to the effective date of the Report could necessitate revisions, and Mr. Fletcher Lewis, P.E., confirmed in the Report that no guarantee is given or implied that the forecast production or cash flows presented will be achieved.

The reserves were assigned as Producing, Possible and Probable, following definitions and guidelines prepared by the Standing Committee on Reserves Definitions of the CIM (Petroleum Society). There may be some variation on the individual reserve entity but the aggregate of the reserves were multiple entities and should adhere to the required probabilities. The reserves are estimated and anticipated to be recovered from known accumulations from a given date forward. These are based on the analysis of drilling, geological, geophysical and engineering data with the use of established technology under specified economic conditions which are generally accepted as being reasonable.

The Report included nine wells with production history, with the remainder being classified as Proved Undeveloped, Probable and Possible reserves. Although the aggregate reported reserves for each category meet the required degree of certainty, with only the limited production from various formations Mr. Lewis could not provide assurance that the individual reserves will meet the quantitative confidence level of 90% for Proved reserves, 50% for Probable reserves or 10% for Possible reserves as required under NI 51-101.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is at least a 90% probability that the quantities actually recovered will equal or exceed the estimated Proved reserves.

Probable reserves are those additional reserves that are less certain to be recovered than Proved reserves. There is at least a 50% probability that the quantity actually recovered will equal or exceed the sum of the estimated Probable reserves.

Possible reserves are those additional reserves that are less certain to be recovered than Probable reserves. There is at least 10% probability that the quantity actually recovered will equal or exceed the sum of the estimated Possible reserves.

Reserve estimates are only as reliable as the amount and quality of data that is available. The reserves assigned were developed with accepted engineering and evaluation principles, and are believed to be reasonable; however, the reserves should be accepted with the understanding that additional information subsequent to the date of this report might require their revision.

ECONOMIC ANALYSIS

The oil price received in this area for August 2005 was $58.10 per barrel. This oil price was used throughout the life of this evaluation for the constant price and expense economic case.

Oil pricing for the forecast price and escalated expenses economic case was used from The Twenty-fourth Annual Society of Petroleum Evaluation Engineers Survey of Economic Parameters Used in Property Evaluation. This survey polled producers, banks and consultants to determine what they believe the future pricing would be. The author of the Report used the combined average price per year, with prices ranging from a low of $28.23 per barrel of oil to a high of 47.97 per barrel of oil forecasted between 2005 and 2015 by the afore-mentioned parties.

The gas price received this area for August 2005 was $9.58 per MCF. This gas price was used throughout the life of the evaluation for the constant price and expense economic case.

Gas pricing for the forecast price and escalated expenses economic case was also used from The Twenty-fourth Annual Society of Petroleum Evaluation Engineers Survey of Economic Parameters Used in Property Evaluation. This survey polled producers, banks and consultants to determine what they believe the future pricing would be. The author of the Report used the combined average price per year, with prices ranging from a low of $4.44 per mcf to a high of 6.70 per mcf forecasted between 2005 and 2015 by the afore-mentioned parties.

The Report is available for viewing at the head office of the Company during normal business hours.

Forward-Looking Statements:

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Odyssey's periodic filings with Canadian Securities Regulators. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Odyssey does not assume the obligation to update any forward-looking statement.

ON BEHALF OF THE BOARD

Joe DeVries, Chief Executive Officer

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

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