Profound Energy Inc.
TSX : PFX

Profound Energy Inc.

March 04, 2009 19:27 ET

Profound Energy Inc. Releases December 31, 2008 Reserve Report

CALGARY, ALBERTA--(Marketwire - March 4, 2009) - Profound Energy Inc. (TSX:PFX) ("Profound" or the "Company") has released its reserves report effective December 31, 2008, as independently evaluated by GLJ Petroleum Consultants ("GLJ"). The evaluation is performed using the reserves definitions and disclosure requirements of the Canadian Oil and Gas Evaluation Handbook and the Canadian Securities Administrators National Instrument 51-101.

On April 1 2008 Profound completed the acquisition of Defiant Resources Corporation ("Defiant") on the basis of issuing .55 Profound shares for 1 Defiant share, or 12.4 million common shares of Profound. Defiant's reserves were evaluated by GLJ at 2.5 million Barrels of Oil equivalent ("boe") Proved reserves, 1.1 million boe Probable reserves for a total of 3.5 million boe Proved plus Probable reserves.

The summary of finding costs and recycle ratios will be included in the Financial Statements and Management Discussion and Analysis to be released on or about March 19, 2009.

Highlights of the year end reserves report:

- Proved and Probable reserves grew 28 per cent to 12.3 million boe through a combination of a strategic acquisition, dispositions and drilling

- 2008 production replacement was 2.7 times on a Proved plus Probable basis

- Proved reserves increased by 39% to 8.3 million boe

- Proved Developed producing reserves represent 68% of Total Proved reserves

- Total Proved reserves represents 67% of Total Proved plus Probable reserves

- Net Present Value of the reserves, before income tax, discounted at 10% is $214,805,000

Reserves

The tables below summarize Profound's working interest reserves on a gross basis (before deduction for royalties) as at Dec. 31, 2008, using forecast prices and costs based on the GLJ January 1, 2009 price forecast.



2008 2007 Change
Reserves category (mboe) (mboe) (%)

Proved
Developed producing 5,652 3,853 47
Developed non-producing 394 260 52
Undeveloped 2,260 1,857 22
Total proved 8,306 5,970 39
Probable 3,967 3,645 9
Total proved plus probable 12,273 9,615 28


Working Interest Reserves expressed in Net Present Values based on Future
Prices and Costs at Various Discount Rates, Before Income Tax in Thousands
of dollars.


0% 10% 15%
Proved
Developed producing $ 179,638 $ 118,719 $ 102,207
Developed non-producing $ 12,060 $ 7,518 $ 6,345
Undeveloped $ 60,837 $ 33,522 $ 26,171
Total proved $ 252,535 $ 159,758 $ 134,723
Probable $ 144,748 $ 55,047 $ 40,165
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Total proved plus probable $ 397,282 $ 214,805 $ 174,888
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Working Interest Reserves expressed by product type

Oil & NGLs Natural Gas Oil Equiv.
(mbbl) (mmcf) (mboe)

Proved
Developed producing 1,718 23,604 5,652
Developed non-producing 121 1,644 394
Undeveloped 608 9,914 2,260
Total proved 2,446 35,161 8,306
Probable 1,061 17,440 3,967
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Total proved plus probable 3,506 52,601 12,273
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Reconciliation of Company Gross Reserves by category

Proved plus
Proved Probable
Factors (mboe) (mboe)
December 31, 2007 5,970 9,615

Discoveries 192 274
Extensions 1,530 1,896
Technical revisions (278) (1,202)
Acquisitions 2,459 3,521
Dispositions (576) (840)
Production (991) (991)
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December 31, 2008 8,306 12,273
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Negative technical revisions were due to well production analysis reducing the amount of probable reserves assigned, and lower natural gas liquids (NGLs) yields on wells.

Dispositions reflect the sale of three producing properties at Brazeau, Majeau and Atim.

The GLJ Jan. 1, 2009, price forecast assumptions utilized in the analyses is as follows.



GLJ Consultants Ltd. January 1, 2009 Price Forecast

Edmonton
Crude Oil
WTI Par Price AECO-C
Cushing 40 degree Hardisty Gas Price Exchange
Oklahoma api Heavy Oil ($CAD/MM Rate
Year ($US/bbl) ($CAD/bbl) ($CAD/bbl) btu) ($Cdn/US)

2009 57.50 68.61 43.10 7.58 0.825
2010 68.00 78.94 49.76 7.94 0.850
2011 74.00 83.54 54.35 8.34 0.875
2012 85.00 90.92 59.23 8.70 0.925
2013 92.01 95.91 62.54 8.95 0.950


DISCLAIMER

Certain information regarding Profound in this news release including management's assessment of future plans, asset dispositions, production, drilling program and operations and the effect on Profound may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, risks associated with sour hydrocarbons, changes to the proposed royalty regime prior to implementation and thereafter, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could effect Profound's operations and financial results are included in Profound's Annual Information Form on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Profound does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

In this news release, reserves and production data are commonly stated in barrels of oil equivalent ("boe") using a six to one conversion ratio when converting thousands of cubic feet of natural gas ("mcf") to barrels of oil ("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or "ngls"). Such conversion may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf to one 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.

Contact Information

  • Profound Energy Inc.
    William T. Davis
    President & CEO
    (403) 513-1379
    (403) 237-6103 (FAX)
    Email: bdavis@profoundenergy.ca
    or
    Profound Energy Inc.
    Nicholas Wemyss
    COO and Exec VP
    (403) 513-1378
    (403) 237-6103 (FAX)
    Email: nwemyss@profoundenergy.ca
    or
    Profound Energy Inc.
    Suite 380, 435-4th Avenue SW
    Calgary, Alberta, T2P 3A8