Pan Orient Energy Corp.
TSX VENTURE : POE

Pan Orient Energy Corp.

April 07, 2011 08:30 ET

Pan Orient Announces 2010 Year-End Thailand Reserves Update

CALGARY, ALBERTA--(Marketwire - April 7, 2011) -

Pan Orient Energy Corp. (TSX VENTURE:POE) announced the results of its December 31, 2010 independent reserves evaluation for Thailand on-shore concessions.

The evaluation was conducted by Gaffney, Cline & Associates (Consultants) Pte. Ltd. of Singapore ("Gaffney Cline") for the Thailand assets and was prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

Crude oil reserves in Thailand at December 31, 2010 have been assigned to our four on-shore concessions in Thailand, being Concession SW1, Concession L44/43, and Concession L33/43 where Pan Orient is the operator and has a 60% working interest, and Concession L53/48 where Pan Orient is the operator and has a 100% working interest.

Thailand Reserves Summary and Highlights:

  • The net present value of proved and probable reserves after tax for the four concessions in Thailand, using forecast prices and discounted at 10%, is Cdn$509 million, an increase of 11% over the prior year and representing $9.00 per Pan Orient share, based on the current 56.5 million Pan Orient shares outstanding.

  • Proved plus probable reserves of 31.9 million barrels at December 31, 2010, a 13% decrease from 36.7 million barrels at December 31, 2009. Reserves at December 31, 2010 include new oil field discoveries in 2010 at the Wichian Buri Extension field ("WBEXT") in Concessions L44/43 & L33/43, the L33 field in Concession L33/43, and the L53A field in Concession L53/48 offset by a downward revision of previously assigned reserves mainly at the Na Sanun Central and NSE-F1 fields in Concession L44/43.

  • Thailand proved plus probable crude oil reserves at December 31, 2010 reflect the following:

    • Discovery in 2010 of the WBEXT field in Concessions L44/43 & L33/43 with oil sales commencing in August 2010 and 8.2 million barrels of proved and probable reserves assigned at year-end.

    • Discovery in 2010 of the L33 field in Concession L33/43 with oil sales commencing in November 2010 and 2.8 million barrels of proved and probable reserves assigned at year-end.

    • Concession L53/48 oil sales commenced in August 2010 and 1.4 million barrels of proved and probable reserves assigned at year-end (no reserves were assigned at December 31, 2009).

    • Downward reserve revisions to proved and probable reserves, mainly at Na Sanun East Central and NSE-F1 fields in Concession L44/43, were 15.7 million barrels at December 31, 2010. This downward revision was the result of lower than expected production performance related mainly to a higher than initially estimated oil / water contact throughout the Na Sanun East Central and NSE-F1 fields and a natural gas cap in the eastern portion of the NSE-F1 field. The expectation of a downward revision at Na Sanun East Central and NSE-F1 fields was discussed as part of the 2010 second quarter report in August 2010 and again with the 2010 third quarter report results in November 2010.

    • Pan Orient's oil sales in 2010 were 1.4 million barrels, an average of 3,884 barrels per day, with 0.4 million barrels, or 4,056 barrels per day, in the fourth quarter of 2010.


Summary of Thailand Crude Oil Reserves as of December 31, 2010, as provided by Gaffney Cline     (net to Pan Orient)
Marketable Reserves – Company Gross (thousands of  barrels) Pan Orient
Proved            7,363
Probable            24,572
Total Proved plus Probable            31,935
Possible            49,301
Total Proved plus Probable plus Possible            81,236
   
Summary of Thailand Crude Oil Proved plus Probable Reserves as of December 31, 2010, by Major Field as provided by Gaffney Cline (thousands of barrels net to Pan Orient)
Concession Major Field Gross Proved Gross Probable Gross Proved plus Probable
L44/43 Na Sanun East (incl. NSE-F1) 2,051 5,295 7,346
  Bo Rang North 2,992 6,370 9,362
  Wichian Buri Extension (portion in L44) 1,594 3,733 5,327
  Various fields 33 1,930 1,963
L33/43 L33 Field 223 2,564 2,787
  Wichian Buri Extension (portion in L33) - 2,862 2,862
L53/48 L53A Field 258 1,145 1,403
SW1 Various fields 212 674 886
    7,363 24,572 31,935
Reconciliation of Changes in Thailand Crude Oil Reserves as of December 31, 2010, as provided by Gaffney Cline (net to Pan Orient)
(thousands of barrels) Gross Proved Gross Probable Gross Proved plus Probable
December 31, 2009 9,525 27,160 36,684
Extensions - - -
Improved Recovery - - -
Technical Revision (2,819) (12,911) (15,730)
Discoveries 2,075 10,324 12,399
Acquisitions - - -
Dispositions - - -
Economic Factors - - -
Production (1,418) - (1,418)
December 31, 2010 7,363 24,572 31,935
       
Summary of Thailand Net Present Values as of December 31, 2010, as provided by Gaffney Cline (Before Income Tax net to Pan Orient)
Present Value - Before Tax (Cdn$ million) Undiscounted 5% 10% 15%
Proved 424 357 307 269
Probable 1,240 898 676 525
Total Proved plus Probable 1,663 1,255 983 794
Summary of Thailand Net Present Values as of December 31, 2010, as provided by Gaffney Cline (After Income Tax net to Pan Orient)
Present Value - After Tax (Cdn$ million) Undiscounted 5% 10% 15%
Proved 232 197 170 149
Probable 622 451 339 263
Total Proved plus Probable 854 647 509 413
Per Pan Orient share (Note 8) $ 15.10 $ 11.44 $ 9.00 $ 7.30

Notes:
         
1) Thailand reserves and values shown represent Pan Orient's 60% working interest for Concessions SW1, L44/43, & L33/43 and Pan Orient's 100% working interest for Concession L53/48.
2) The tables shown have assessed reserves at forecast crude oil reference prices & costs. 
3) The reference price for crude oil per barrel (US$ WTI per barrel) is $88.40 for 2011, $89.14 for 2012, $88.77 for 2013, $88.88 for 2014, $90.22 for 2015, and prices increase at 1.5% per year thereafter. 
4) Oil revenue for these reserves is equal to approximately 88% of the forecast crude oil reference price.
5) Tables shown assessed reserves with a foreign exchange rate of CDN$1=US$0.984
6) The inflation rate starting in 2011 is 2.0% per year.
7) Estimated future undiscounted development costs at December 31, 2010 were Cdn$33 million for proved reserves and Cdn$76 million for proved plus probable reserves.
8) Per share values were calculated based on 56,543,807 Pan Orient shares outstanding at April 1, 2011. 
9) Net present values before income tax are after deduction of the SRB (Special Remuneratory Benefit tax) in Thailand.
10) Net present values after income tax are after deduction of the SRB (Special Remuneratory Benefit tax) and income tax in Thailand.
11) The engineered values disclosed may not represent fair market value.
12) Totals may not add exactly due to rounding.

Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

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.

Contact Information

  • Pan Orient Energy Corp.
    Jeff Chisholm
    President and CEO
    (403) 294-1770
    or
    Pan Orient Energy Corp.
    Bill Ostlund
    Vice President Finance and CFO
    (403) 294-1770