Calvalley Petroleum Inc., (TSX: CVI.A) provides 2014 reserves update

CALGARY, Feb. 17, 2015 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" or the "Company") announces the results of its December 31, 2014 reserves evaluation.

The reserves evaluation was conducted by McDaniel & Associates Consultants Ltd. ("McDaniel") who prepared an independent engineering evaluation of the reserves attributable to the Company's 50% working interest in Block 9 in a report dated January 30, 2015 with an effective date of December 31, 2014 (the "McDaniel Report") in accordance with National Instrument 51 101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook").

The following information is derived from the McDaniel Report.

Company interest proved reserves of crude oil of 10.1 million barrels declined from 11.5 million barrels in 2013. Similarly company interest proved plus probable reserves of crude oil of 20.9 million barrels declined from 22.9 million barrels in 2013.

The following information is derived from the McDaniel Report:

Summary of Oil and Gas Reserves-Company Interest

			Light and Medium Oil		Heavy Oil		Total Crude Oil
Reserves Category			(Mbbl)		(Mbbl)		(Mbbl)
Proved^(1)
	Developed Producing		3,775		565		4,339
	Undeveloped		3,705		2,022		5,727
Total Proved			7,479		2,587		10,066
Probable^(2)			8,898		1,961		10,859
Total Proved plus Probable			16,378		4,547		20,925
Possible^(3)			6,634		1,098		7,731
Total			23,011		5,645		28,656

Notes:

(1) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

(2) "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

(3) "Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a ten per cent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

Summary of Net Present Value of Future Net Revenue

		Before Income Tax Expenses Discounted at (%/year)
Reserves Category		0 (M$US)		5 (M$US)		10 (M$US)		15 (M$US)		20 (M$US)
Proved
	Developed Producing	75,803		63,525		54,509		47,687		42,388
	Undeveloped	132,085		93,341		67,742		50,345		38,218
Total Proved		207,889		156,866		122,250		98,032		80,606
Probable		306,664		190,288		124,265		84,863		60,235
Total Proved plus Probable		514,553		347,155		246,516		182,895		140,841
Possible		223,900		147,834		102,776		74,690		56,369
Total		738,453		494,989		349,291		257,585		197,211
		After Income Tax Expenses Discounted at (%/year)
Reserves Category		0 (M$US)		5 (M$US)		10 (M$US)		15 (M$US)		20 (M$US)
Proved
	Developed Producing	50,566		43,037		37,408		33,082		29,673
	Undeveloped	86,556		60,579		43,442		31,821		23,742
Total Proved		137,122		103,615		80,850		64,903		53,415
Probable		199,578		123,551		80,370		54,574		38,435
Total Proved plus Probable		336,700		227,166		161,221		119,476		91,850
Possible		145,535		96,023		66,699		48,428		36,516
Total		482,234		323,190		227,920		167,904		128,366

Notes:

(1) The McDaniel Report employed the following pricing assumptions for Brent Crude Oil as of January 1, 2015 in estimating the reserves data using forecast prices and costs:  2015 US$ 69.83;   2016 US$ 78.06;   2017 US$ 83.07;   2018 US$ 88.08;  2019 US$ 92.49;   2020 US$ 97.10; 2021 US$ 99.01

(2) The weighted average realized sales price for Block 9 crude oil for the year ended December 31, 2014 was US$86.71 per barrel.

About Calvalley

Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates Block 9 of the Masila Basin, in The Republic of Yemen.

Forward Looking Information

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. This press release includes information pertaining to the reserves and the net present value of future net revenue of the Company as at December 31, 2014 as evaluated by McDaniel in the McDaniel Report. Statements relating to "reserves" are by their nature forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. The McDaniel Report is based on a number of assumptions relating to a variety of factors including the timing and amount of capital expenditures, forecast prices and costs, production rates and ultimate recovery of reserves. Reserve estimates provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Moreover, no assurance can be given that the forecast prices and cost assumptions used in the McDaniel Report will be attained and variances could be significant. As a consequence, actual results may differ materially from those anticipated in the forward looking information. The net present value of future net revenue referred to herein should not be construed as the fair market value of the estimated reserves of the Company's properties.

The material assumptions and risk factors that could influence the forward looking information are contained in the Company's annual information form for the year ended December 31, 2013 dated March 18, 2014 and Management's Discussion and Analysis for the nine months ended September 30, 2014 which are available under the Company's issuer profile on SEDAR at www.sedar.com and which are incorporated herein by reference.

Forward-looking information involves significant risk and uncertainties. Although the forward-looking information contained herein is based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with the forward-looking information. Investors should not place undue reliance on forward-looking information. Forward looking information is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.

SOURCE Calvalley Petroleum Inc.

[email protected] or [phone], Edmund Shimoon, Chairman and CEO, Gerry Elms, CFO