Addax Petroleum announces year-end reserves and 2006 average oil productionadmin
Addax Petroleum Corporation announces that its Board of Directors has accepted a reserve report prepared by Netherland, Sewell & Associates Inc., independent oil and natural gas reservoir engineers (“NSAI” and the “NSAI Report”), that evaluates all of the Corporation’s petroleum reserves. As at December 31, 2006, NSAI estimates gross working interest proved plus probable reserves for the Corporation to be 353.7 MMbbl, representing an increase of approximately 80 per cent over the quantities estimated by NSAI at the prior year-end. In addition, the Corporation produced an average of 90,050 bbl/d of oil during 2006, representing an increase of 38% over 2005. Average oil production for 2006 included 86,300 bbl/d from Nigeria, which exceeded the target production level of 85,000 bbl/d, and 3,750 bbl/d from Gabon.
This announcement coincides with the filing of a material change report by the Corporation which can be accessed through the Corporation’s website at www.addaxpetroleum.com and through www.sedar.com. The reserve estimates in this release are based on forecast prices and costs. Except as otherwise indicated, references to “$” and to “dollars” refer to the currency of the United States of America.
Commenting today, Addax Petroleum’s President and Chief Executive Officer, Jean Claude Gandur, said: “2006 has been Addax Petroleum’s most active year to date and I am delighted that our efforts continue to strengthen significantly our existing reserves base. This excellent performance reflects continued reserves growth in Nigeria, our major producing area, combined with the acquisition of significant reserves in Gabon and drilling in the Kurdistan Region of Iraq. Growth in production and reserves are core to Addax Petroleum’s value creation strategy. I believe our exceptional 2006 success in growing our production, adding to our reserves base and extending our reserve life represents a major accomplishment that Addax Petroleum has achieved for its shareholders and stakeholders.”
Selected Reserve Report Highlights
The NSAI Report was prepared for the Corporation at the direction of Addax Petroleum’s Technical and Reserves Committee, using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National Instrument 51-101.
The NSAI Report is limited to oil reserves on the Corporation’s properties and does not include exploration and contingent resources. Highlights of the NSAI Report and the Corporation’s 2006 production, with comparatives to 2005 results, where appropriate, are as follows:
– Total gross working interest proved plus probable reserves increased by approximately 80 per cent to 353.7 MMbbl as at December 31, 2006 from 196.7 MMbbl as at December 31, 2005. – In Nigeria, gross working interest proved plus probable reserves increased by approximately 10 per cent to 215.4 MMbbl as at December 31, 2006 from 196.7 MMbbl as at December 31, 2005 and oil production for 2006 averaged 86,300 bbl/d. – In Gabon, gross working interest proved plus probable reserves are estimated to be 98.2 MMbbl as at December 31, 2006. The Corporation acquired the business of Pan-Ocean Energy Corporation Limited (“Pan- Ocean”) in Gabon in September 2006 which had reported gross working interest proved plus probable reserves of 67.5 MMbbl as at December 31, 2005 as estimated by Pan-Ocean’s independent reserve engineers. Since Addax Petroleum acquired the assets in Gabon in September, the Corporation has achieved averaged daily production of 11,800 bbl/d and 3,750 bbl/d over the entire year. – In the Kurdistan Region of Iraq, gross working interest proved plus probable reserves for the Corporation at the Taq Taq field are estimated to be 40.1 MMbbl as at December 31, 2006. The Corporation did not book any reserves for the Taq Taq field in 2005. – The Corporation’s overall 2006 reserves replacement ratio was 5.8. The reserves replacement ratio is calculated by dividing the gross working interest proved plus probable reserve additions of 189.9 MMbbl (including acquisitions and before deduction of 2006 production of 32.9 MMbbl) by the 2006 production. – The Corporation’s 2006 reserve life index, based on proved plus probable reserves as at December 31, 2006 and average 2006 oil production, has increased by 2.5 years to 10.8 years in 2006 from 8.3 in 2005. The 2006 reserve life index is calculated by dividing the gross working interest proved plus probable reserves of 353.7 MMbbl as at December 31, 2006 by the 2006 production of 32.9 MMbbl. – Total gross working interest proved plus probable plus possible reserves have increased by 72 per cent to 480.4 MMbbl as at December 31, 2006 from 278.7 MMbbl as at December 31, 2005. The estimated net present value of future net revenue after taxes for the gross working interest proved plus probable plus possible reserves as at December 31, 2006, discounted at 10 percent, is $4,147 billion
based on forecast prices and costs.
About Addax Petroleum
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa and has increased its crude oil production from an average of 8,800 bbl/d for 1998 to an average of approximately 90,000 bbl/d for 2006. Further information about Addax Petroleum is available at www.addaxpetroleum.com or at www.sedar.com.
Legal Notice – Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements under applicable securities legislation. Such statements are generally identifiable by the terminology used, such as “anticipate”, “believe”, “intend”, “expect”, “plan”, “estimate”, “budget”, “outlook” or other similar wording. Forward-looking information includes, but is not limited to, reference to business strategy and goals, future capital and other expenditures, reserves and resources estimates, drilling plans, construction and repair activities, the submission of development plans, seismic activity, production levels and the sources of growth thereof, project development schedules and results, results of exploration activities and dates by which certain areas may be developed or may come on-stream, royalties payable, financing and capital activities, contingent liabilities, and environmental matters. By its very nature, such forward-looking information requires Addax Petroleum to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information. Such factors include, but are not limited to: imprecision of reserves and resources estimates, ultimate recovery of reserves, prices of oil and natural gas, general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil prices; refining and marketing margins; the ability to produce and transport crude oil and natural gas to markets; the effects of weather and climate conditions; the results of exploration and development drilling and related activities; fluctuation in interest rates and foreign currency exchange rates; the ability of suppliers to meet commitments; actions by governmental authorities, including increases in taxes; decisions or approvals of administrative tribunals; changes in environmental and other regulations; risks attendant with oil and gas operations, both domestic and international; international political events; expected rates of return; and other factors, many of which are beyond the control of Addax Petroleum. More specifically, production may be affected by such factors as exploration success, start-up timing and success, facility reliability, reservoir performance and natural decline rates, water handling, and drilling progress. Capital expenditures may be affected by cost pressures associated with new capital projects, including labour and material supply, project management, drilling rig rates and availability, and seismic costs. These factors are discussed in greater detail in filings made by Addax Petroleum with the Canadian provincial securities commissions.
Readers are cautioned that the foregoing list of important factors affecting forward-looking information is not exhaustive. Furthermore, the forward-looking information contained in this press release is made as of the date of this press release and, except as required by applicable law, Addax Petroleum does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.
For further information
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Source: Addax Petroleum Corporation