Twoco Petroleums Ltd.
TSX VENTURE : TWO

Twoco Petroleums Ltd.

November 17, 2011 17:30 ET

Twoco Petroleums Ltd. Heavy Oil Reserves Update

CALGARY, ALBERTA--(Marketwire - Nov. 17, 2011) - Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) is pleased to announce the results of its independent reserve evaluation for the Company's Sparky heavy oil property in the Warspite area of Alberta as of September 30, 2011 as prepared by Sproule Associates Limited ("Sproule") in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (the "Evaluation"). The Evaluation was limited to Twoco's Sparky heavy oil property and does not take into account any of the Company's natural gas or other properties.

Highlights of the Evaluation include:

  • Total Proved Heavy Oil Reserves of 1,029,800 boe (941,900 barrels heavy oil; 527 mmcf solution gas) - this represents a 496% increase from the December 31, 2010 corporate reserve evaluation of the Company's Sparky heavy oil property in the Warspite area of Alberta;

  • Total Proved Plus Probable Heavy Oil Reserves of 3,252,800 boe (2,975,200 barrels heavy oil; 1,666 mmcf solution gas) - this represents a 677% increase from the December 31, 2010 corporate reserve evaluation of the Company's Sparky heavy oil property in the Warspite area of Alberta; and

  • Heavy Oil Reserve Values, using Sproule's October 31, 2011 forecast pricing and calculated using a 10% discount rate, of $21.25 million on a Total Proved basis and $56.96 million on a Total Proved Plus Probable basis.

The large increase in heavy oil reserves is primarily attributable to the results associated with the Company's previously announced 2 gross (1.93 net) tri-leg horizontal oil wells that were recently drilled and placed on production in the Company's Sparky heavy oil property in the Warspite area of Alberta.

Incorporating this Evaluation with Twoco's December 31, 2010 corporate evaluation, Twoco's current Net Asset Value before income tax is estimated, using a 10% discount rate, to be $0.95/share on a basic outstanding share basis and $0.71/share on a fully diluted share basis (both calculated on a Total Proved Plus Probable basis).

Twoco is currently drilling one gross (0.97 net) quad-leg horizontal oil well on the Company's Sparky heavy oil property in the Warspite area of Alberta. It is anticipated that this well will commence production prior to year end.

Twoco is an oil and gas company engaged in the exploration for, and the acquisition, development and production of, oil and natural gas reserves primarily in the Province of Alberta. Twoco has 71,728,095 common shares issued and outstanding as at today's date.

In this news release the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas for one barrel (Bbl) of oil based on an energy equivalency conversion method. 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 to the burner tip and does not represent a value equivalency at the wellhead.

The net asset values disclosed herein do not represent fair market value.

Forward-Looking Statements:

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements regarding the timing of production of the Company's quad-leg horizontal oil well. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Twoco's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Twoco believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Twoco does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

Neither the 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

  • Twoco Petroleums Ltd.
    Wayne A. Malinowski
    President and Chief Executive Officer
    (403) 231-8653
    (403) 237-6048 (FAX)