Pilot Energy Ltd.

Pilot Energy Ltd.

April 25, 2007 19:07 ET

Pilot Energy Ltd Announces 2006 Reserves

CALGARY, ALBERTA--(CCNMatthews - April 25, 2007) - Pilot Energy Ltd. (TSX VENTURE:PGY) is pleased to announce the results of its independent reserve evaluation for the year ended December 31, 2006 as evaluated by Sproule Associates Limited ("Sproule") in accordance with the rules provided by National Instrument 51-101.


- The Company's proved plus probable reserves increased in 2006 by 21% from 2.4 MMBoe to 2.9 MMBoe.

- The Company's proved reserves increased in 2006 by 9.1% from 1.7 MMBoe to 1.8 MMBoe.

- Reserve additions replaced production by 2.7 times on a proved plus probable basis.

- Pilot's proved plus probable reserve life index (RLI), based on 2006 annualized fourth quarter average production of 804 boe/day is 9.9 years.

- The net present value of Pilot's estimated future net revenue based on forecast prices and costs from proved plus probable reserves discounted at 10% is $45.2 million.

- All-in F&D costs for 2006 were $24.91/boe (proved plus probable) including future capital, $14.34/boe (proved plus probable) excluding future capital.

- Three year average F&D costs are $18.19/boe (proved) and $13.45/boe (proved plus probable) including future capital.

Oil and Natural Gas Reserves:

Pilot's December 31, 2006 reserves were evaluated by Sproule under the guidelines of NI 51-101.

During 2006, Pilot increased its total proved reserves by 9.1% to 1,816 Mboe from 1,664 Mboe at December 31, 2005 based on forecast prices and costs. The composition of total proved reserves at December 31, 2006 consists of 95% oil and natural gas liquids and 5% natural gas.

Pilot grew its total proved plus probable reserves by 20.8% to 2,913 Mboe from 2,411 Mboe at December 31, 2005 based on forecast prices and costs. This increase represents a production replacement of 2.7 times. The future capital required to bring non-producing and undeveloped proved reserves and probable reserves on production is estimated at $8.4 million.

The following table provides summary information presented in the Sproule report. Additional reserve information will be presented in the Company's fourth quarter and year-end financial results and in the Corporation's Statement of Reserve Data and Other Oil and Gas Information which will be filed on SEDAR at www.sedar.com prior to April 30, 2006.

December 31, 2006

Light and Natural
Medium Natural Gas Total
Oil Heavy Oil Gas Liquids Boe
RESERVES CATEGORY (Mbbls) (Mbbls) (MMcf) (Mbbl) (Mboe)

Developed Producing 980.9 476.5 471.0 0.2 1,536.1
Developed Non-Producing - - 20.0 - 3.4
Undeveloped 150.0 109.6 103.0 - 276.8
TOTAL PROVED 1,130.9 586.1 595.0 0.2 1,816.4
PROBABLE 649.2 389.7 347.0 0.2 1,096.9
TOTAL PROVED PLUS PROBABLE 1,780.1 975.8 942.0 0.4 2,913.3


1) Gross reserves means, Pilot's working interest (operating and non-
operating) share before deduction of royalties and without including any
royalty interests of Pilot.

2) Barrel of oil equivalent (Boe) has been calculated using the conversion
factor of 6 mcf of natural gas being equivalent to one bbl of oil. Boes
may be misleading, particularly if used in isolation. A boe conversion
ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

3) Numbers may not add due to rounding.

Net Present Value and Future Net Revenue:

The forecast prices used in the reserve report were Sproule's forecast prices as at December 31, 2006. The increase in future net revenue is primarily the result of increased volumes related to new drilling, acquisitions, and increased product prices compared to the prior year.

The estimated future net revenues are presented before deducting future estimated site restoration costs and are reduced for: estimated future abandonment costs and estimated future capital for development associated with non-producing, undeveloped and probable reserve additions.

Before Income Taxes Discounted at (%/year)

0 5 10 15 20
RESERVES CATEGORY (M$) (M$) (M$) (M$) (M$)
Developed Producing 41,851 34,459 29,664 26,289 23,769
Developed Non- Producing 81 75 69 64 60
Undeveloped 5,398 3,675 2,592 1,854 1,322
TOTAL PROVED 47,330 38,209 32,324 28,207 25,152
PROBABLE 30,830 18,547 12,876 9,706 7,697
TOTAL PROVED PLUS PROBABLE 78,160 56,756 45,201 37,914 32,849


1) The estimated future net revenues are stated before deducting future
estimated site restoration costs and are reduced for estimated future
abandonment costs and estimated capital for future development associated
with the reserves.

2) Numbers may not add due to rounding.

3) It should not be assumed that the estimates of future net revenues
presented in the tables below represent the fair market value of the
reserves. There is no assurance that the constant prices and cost
assumptions and forecast prices and cost assumptions will be attained and
variances could be material. The recovery and reserve estimates of the
Corporation's crude oil, natural gas liquids and natural gas reserves
provided herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil, natural gas and
natural gas liquid reserves may be greater than or less than the
estimates provided herein.

Net Asset Value per Share (unaudited):

Net Asset Value ("NAV") per share has been calculated utilizing forecasted
pricing and costs. Results are shown at 10% Before Income Tax and 5% Before
Income Tax.

Discounted at (%/year)

10% Before Income
Taxes 5% Before Income Taxes
(M$) $/Share (1) (M$) $/Share (1)

Total Proved plus Probable
Reserve Value 45,201 2.29 56,756 2.88
Undeveloped Land (2) 3,784 0.19 3,784 0.19
Unaudited Year-End Debt (net
of working capital) (15,354) (0.78) (15,354) (0.78)

Total Net Asset Value 33,631 1.71 45,186 2.29


1) Based on 19.7 million common shares issued and outstanding.

2) Undeveloped Land based on Sproule's December 31, 2006 Evaluation.

3) Numbers may not add due to rounding.

4) Does not include approximately 40 km(2) of 3D and 2700 km of 2D seismic
data which is a combination of proprietary and trade data.

Pilot is a Canadian junior energy company engaged in the exploration and development of oil and natural gas in Alberta and Saskatchewan.

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Pilot at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors, many of which are beyond the control of Pilot. There is no representation by Pilot that actual results achieved during the forecast period will be the same, in whole or in part, as forecast.

Issued and Outstanding Common Shares: 19,763,362

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

Contact Information

  • Pilot Energy Ltd.
    Todd Lemieux
    (403) 514-8115 Ext. 226
    Pilot Energy Ltd.
    Doug Smith
    Chief Financial Officer
    (403) 514-8115 Ext. 232