Tuscany Energy Ltd. announces a 57% increase in reserves value for 2009
CALGARY, April 7 /CNW/ - Tuscany Energy Ltd. (TUS-TSXV) is pleased to provide a summary of the Company's reserves at December 31, 2009 and to provide an update of the results of the Evesham, Saskatchewan horizontal oil wells.
Summary of Year-End 2009 Reserves
The Company recorded a positive proved plus probable reserves increase of 109 MBOE resulting from drilling, and technical revisions in 2009. As a result the net present value of the reserves, before tax and using a 10% discount rate, increased by 57% to $17.2 million, compared with $10.9 million in 2008.
Tuscany's focus during the year was to prove up the development opportunity in the Dina formation on Tuscany's Evesham property in Saskatchewan. The successful drilling of the Company's second horizontal well on the core property has enabled the Company to extend the proved and probable reserves on the property by over 300 MBOE.
The Company's December 31, 2009 reserves were evaluated in accordance with the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities by McDaniel and Associates Consultants Ltd. ("McDaniel") independent reserves evaluators of Calgary, Alberta, in a report prepared by McDaniel dated March 31, 2010 and effective December 31, 2009 (the "McDaniel Report") The following summary is based on the McDaniel Report.
Summary of Reserves
December 31, 2009
SUMMARY OF OIL AND GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2009
FORECAST PRICES AND COSTS
RESERVES
------------------------------------------------------------
LIGHT AND NATURAL GAS
MEDIUM OIL HEAVY OIL NATURAL GAS LIQUIDS TOTAL TOTAL
RESERVES Gross Net Gross Net Gross Net Gross Net Gross Net
CATEGORY (MBbl)(MBbl)(MBbl)(MBbl)(MMcf)(MMcf)(MBbl)(MBbl)(MBOE)(MBOE)
------------------------------------------------------------ ----- ------
PROVED
Developed
Producing 11.4 8.6 227.4 218.5 551.5 536.0 0.6 0.3 331.4 316.8
Developed
Non-
producing - - 45.0 42.8 - - - - 45.0 42.8
Undeveloped - - 102.0 99.8 - - - - 102.0 99.8
TOTAL PROVED 11.4 8.6 374.4 361.1 551.5 536.0 0.6 0.3 478.4 459.4
PROBABLE 2.3 1.6 237.8 224.7 133.7 130.1 0.1 0.1 262.5 248.1
TOTAL PROVED
PLUS
PROBABLE 13.7 10.2 612.3 585.8 685.2 666.1 0.7 0.4 740.9 707.4
------------------------------------------------------------ ----- ------
NET PRESENT VALUES OF FUTURE NET
REVENUE
-------------------------------------------
BEFORE INCOME TAXES
DISCOUNTED AT (% per year)
0 5 10 15 20
RESERVES CATEGORY (MM$) (MM$) (MM$) (MM$) (MM$)
---------------------------------------------------------
PROVED
Developed Producing 11.57 9.34 7.80 6.70 5.89
Developed Non-
producing 2.60 2.00 1.64 1.41 1.24
Undeveloped 2.94 2.10 1.50 1.05 0.72
TOTAL PROVED 17.11 13.44 10.94 9.16 7.84
PROBABLE 13.78 8.90 6.25 4.67 3.65
TOTAL PROVED PLUS
PROBABLE 30.89 22.34 17.19 13.83 11.50
---------------------------------------------------------
Pricing Used in Evaluation
SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS
AS OF DECEMBER 31, 2009
FORECAST PRICES AND COSTS
Alberta
Bow Alb-
Edmon- River Alb- U.S. erta Sask.
ton Hard- Alberta Edm- erta Henry Aver- Spot
WTI Light isty Heavy onton AECO Hub age Sales
Crude Crude Crude Crude NGL Gas Gas Plant Plant
Infl- Exch- Oil Oil Oil Oil Mix Price Price -gate -gate
ation ange $US/ $Cdn/ $Cdn/ $Cdn/ $Cdn/ $Cdn/ $US/ $Cdn/ $Cdn/
YEAR Rate Rate bbl bbl bbl bbl bbl Mcf Mcf MMBtu MMBtu
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Histor-
ical
2009 2.0% 0.880 61.80 65.90 60.25 55.65 67.85 4.15 3.95 3.95 4.05
Fore-
cast
2010 2.0% 0.950 80.00 83.20 72.30 68.10 85.20 6.05 6.05 5.85 5.95
2011 2.0% 0.950 83.60 87.00 73.80 67.60 89.00 6.75 6.90 6.55 6.65
2012 2.0% 0.950 87.40 91.00 74.40 68.00 93.10 7.15 7.30 6.95 7.05
2013 2.0% 0.950 91.30 95.00 75.80 68.10 97.10 7.45 7.70 7.25 7.35
2014 2.0% 0.950 95.30 99.20 79.20 71.10 101.40 7.80 8.15 7.60 7.70
2015 2.0% 0.950 99.40 103.50 82.60 74.20 105.70 8.15 8.50 7.95 8.05
2016 2.0% 0.950 101.40 105.60 74.30 75.70 107.90 8.40 8.75 8.15 8.25
2017 2.0% 0.950 103.40 107.70 85.90 77.20 110.00 8.55 8.90 8.30 8.40
2018 2.0% 0.950 105.40 109.80 87.60 78.70 112.10 8.70 9.10 8.45 8.55
2019 2.0% 0.950 107.60 112.10 89.40 80.40 114.50 8.90 9.30 8.65 8.75
2020 2.0% 0.950 109.70 114.30 91.20 81.90 116.70 9.05 9.45 8.80 8.90
2021 2.0% 0.950 111.90 116.50 93.00 83.60 119.00 9.25 9.65 9.00 9.10
2022 2.0% 0.950 114.10 118.80 94.80 85.20 121.30 9.45 9.85 9.20 9.35
2023 2.0% 0.950 116.40 121.20 96.70 86.90 123.80 9.65 10.05 9.40 9.55
2024 2.0% 0.950 118.80 123.70 98.70 88.70 126.30 9.85 10.25 9.60 9.75
2025+ 2.0% 0.950 +2%/yr +2%/yr +2%/ +2%/ +2%/ +2%/ +2%/ +2%/yr +2%/
yr yr yr yr yr yr
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Evesham Update
The Company announces that oil production from the Evesham HZ 16-16 well averaged 87 Bopd for the month of March 2010 with an 81% oil cut, with cumulative production of 5,977 Bbls to the end of March. The production from the initial well, Evesham HZ 2-21, averaged 19 Bopd for the month of March 2010 and has produced a total of 16,182 Bbls to month end.
As a result of the success of the wells to date the Company plans to drill the third horizontal well on the property in June 2010.
Additional information relating to the results of Tuscany's operations during 2009 and its statement of reserves data (and related report of qualified reserve evaluators and management and board of Tuscany) will be set forth in the Company's audited financial statements and accompanying management's discussion and analysis for the year ended December 31, 2009 and its annual information form for the year ended December 31, 2009, respectively, which the Company expects will be filed on SEDAR on or about April 28, 2010.
Please refer to Tuscany's website at www.tuscanyenergy.com for more information on the Company's developing Evesham horizontal oil wells and other prospects in Saskatchewan.
ADVISORY: Certain information regarding the Company in this News Release including management's assessment of future plans and operations 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, 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, wells not performing as expected, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, 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 foregoing list of factors is not exhausted. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at the Company's website (www.tuscanyenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil at six thousand cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly if used in isolation. A boe conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids (NGLs).
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.
For further information: John G.F. McLeod, President, TUSCANY ENERGY LTD., Telephone: (403) 264-2398, Fax: (403) 261-4072; Robert W. Lamond, Chairman, TUSCANY ENERGY LTD., Telephone: (403) 269-9889, Fax: (403) 261-4072; TSX Venture: TUS, www.tuscanyenergy.com
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