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Thursday, April 9, 2015
Oando Energy Resources (OER) saw an uptick in resources in Nigeria according to its annual independent reserves and resources evaluation undertaken by DeGolyer and MacNaughton (D&M). The company saw a significant increase in reserves, both Proved (1P) and Proved and Probable (2P) Reserves, as a result of technical revisions and the acquisition of ConocoPhillips’ assets in Nigeria compared to its numbers for year-end 2013.
The company’s proved net reserves (1P) increased by 78% to 288.5 mmboe, while Proved and Probable net reserves (2P) increased by 82% to 420.3 mmboe. The increase was largely due to recognizing the precedence of the license renewal under the Nigerian Petroleum Act, which is the basis of the extension of the reserves beyond the current license limit.
While its proved net reserves are up, its best estimate (working interest) Contingent Resources (2C) correspondingly decreased by 78% from 547 mmboe to 122 mmboe as a result of the conversion of approximately 190 mmboe of 2C Resources to 2P Reserves due to the rebased evaluation utilizing 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 D&M. Unrisked and risked Mean Estimate Prospective Resources also decreased to 957.1 mmboe and 229.6 mmboe, respectively.
As for the economic value (NPV 10% of Future Net Revenue) of the Proved and Probable Reserves (2P), OER saw an increase of $545 Million (+44%) to $1,785 million, largely due to the ConocoPhillips acquisition.
“We are very pleased with the new 2014 Reserves Numbers that confirms our thesis at the time we embarked on our transformative COP acquisition,” said PadeDurotoye, CEO of OER. “This large Reserves base gives us significant scope and opportunity to even further enhance production over the coming years and pursue in-field exploration opportunities that will further increase our Resource Base.”
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