Oando Energy Resources Inc (OER) has significantly increased its reserves, both proved and probable, as a result of technical revisions and the acquisition of the assets of ConocoPhillips Company.
According to the company, its Proved net reserves (1P) increased by 78 percent to 288.5 million barrels of oil eqvalent ( MMboe,) while Proved and Probable net reserves (2P) increased by 82 percent, to 420.3 MMboe.
Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. Probable reserves on the other hand are those additional reserves that are less certain to be recovered than proved reserves.
The company said the extension of the reserves beyond the current license limit was largely due to recognising the precedence of the license renewal under the Nigerian Petroleum Act.
It however stated that the best estimate, Contingent Resources (2C) correspondingly decreased by 78 percent, from 547 MMboe to 122 MMboe because of the conversion of approximately 190 MMboe of 2C Resources to 2P Reserves, due to the rebased evaluation utilising the economic life of the producing fields; “Also, net negative revisions of 246 MMboe occurred due to the current crude oil price environment which has deemed certain contingent developments uneconomic; and lastly, the change in the interpretation of reservoirs by the Independent Evaluator.”
Unrisked and Risked Mean Estimate Prospective Resources also decreased to 957.1MMboe and 229.6MMboe, respectively.
Despite these developments, the economic value (NPV 10% of Future Net Revenue) of the Proved and Probable Reserves (2P) has increased by $545 million (+44%) to $1.785 billion, largely due to the acquisition ConocoPhillips Company.
Pade Durotoye , chief executive officer of Oando Energy Resources, reacting to this achievement by his company said: “We are very pleased with the new 2014 Reserves Numbers that confirm our thesis at the time we embarked on our transformative COP acquisition”.
Durotoye said:“We are very pleased with the new 2014 Reserves Numbers that confirm our thesis at the time we embarked on our transformative COP acquisition,”.
He said the large reserves base gives the company significant scope and opportunity to even further enhance production over the coming years and pursue in-field exploration opportunities that will further increase its resource base.”
OER currently has a broad suite of producing, development and exploration assets in the Gulf of Guinea (predominantly in Nigeria). OER’s sales production was 52,734 boe/d for the month ending February 28, 2015.
The company said as a leading E&P player in the Nigerian Oil and Gas sector, it has once again demonstrated its superior strategy, despite the downturn in the sector, adding that its recent announcement of an 82 percent increase in reserves is especially reassuring for its shareholders, as it is likely to have a positive impact on future revenue for the business.
OLUSOLA BELLO
