CALGARY, Alberta, Feb. 03, 2020 (GLOBE NEWSWIRE) — Pan Orient Energy Corp. (“Pan Orient” or the “Company”) (POE – TSXV), on behalf of Pan Orient Energy (Siam) Ltd. (“POS”), announced the results of its December 31, 2019 independent reserves evaluation for Thailand on-shore Concession L53/48 where POS is the operator and has a 100% working interest. Pan Orient has a 50.01% equity interest in POS, which is classified as a Joint Venture under International Financial Reporting Standards and accounted for using the equity method. Pan Orient’s 50.01% equity interest in the assets, liabilities, working capital, operations and capital expenditures of POS are recorded in Investment in the Thailand Joint Venture and Pan Orient does not have any direct interest in, or control over, the crude oil reserves or operations of on-shore Concession L53/48.
The evaluation for the Thailand assets as at December 31, 2019 was conducted by Sproule International Limited of Calgary (“Sproule”) and was prepared in accordance with Canadian Securities Administrators National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day. Reserves volumes reported below are “Company Gross Reserves”, a classification of reserves used in the evaluation which represents production and reserves before deduction of royalties.Commenting today on the year-end 2019 reserve report of Pan Orient Energy (Siam) Ltd., President and CEO Jeff Chisholm stated: “Concession L53 oil sales in 2019 were a record for the concession, averaging 2,120 BOPD. After accounting for the 773,675 barrels of oil produced in 2019, there were year over year increases of 37% in 1P reserves, 34% in 2P reserves and 29% in 3P reserves. Of particular note, estimated ultimate recoveries saw a substantial 1.152 million barrel increase on a 1P basis, 1.755 million barrel increase on a 2P basis and 2.542 million barrel increase on a 3P basis resulting mainly from excellent production performance at the L53DD oil field and a new field oil discovery at AA South. I am pleased with these results and looking forward with a great deal of anticipation towards the Thailand 2020 exploration and appraisal drilling program of four firm exploration and three firm appraisal wells. This program has commenced with the L53-DD6ST2 appraisal well located within the L53-DD oil field. An operations update anticipated in the week of February 10, 2020 will provide further details with regard to this drilling program and the first well results.”Summary of Thailand Reserves at December 31, 2019 for Concession L53/48Thailand crude oil reserves and values at December 31, 2019 of POS (representing the 100% working interest of POS in Concession L53/48):
º Proved oil reserves (“1P”) of 1,235,000 barrels at December 31, 2019, a 37% increase from the 901,000 barrels at December 31, 2018.
º Proved plus probable oil reserves (“2P”) increased 34% to 3,668,000 barrels at December 31, 2019 compared with proved plus probable oil reserves of 2,731,000 barrels at December 31, 2018. The increase in 2019 reflects the following changes during 2019:2019 oil sales of 773,675 barrels (2,120 BOPD), with 615,460 barrels (1,687 BOPD) from the L53DD field, 68,704 barrels (188 BOPD) from the L53G field, 42,879 barrels (117 BOPD) from the L53A field, 26,094 barrels (71 BOPD) from the L53D field, 6,785 barrels (19 BOPD) from the L53B field and 13,753 barrels (38 BOPD) from the new L53AA South field.Discovery of the L53-AA South field with the L53-DD5ST1 exploration well in the second half of 2019 added 13,753 barrels of oil sales in 2019 and has been assigned proved reserves of 42,000 barrels and proved plus probable reserves of 160,000 barrels at December 31, 2019. The L53-DD field discovered in the fourth quarter of 2018 added 615,460 barrels of oil sales in 2019 and 27,667 barrels of oil sales in 2018. The L53-DD field at December 31, 2019 has been assigned proved reserves of 663,000 barrels and proved plus probable reserves of 2,470,000 million barrels (including a positive technical revision of proved plus probable reserves in 2019 of 1,366,000 barrels based on well performance).Positive technical revisions of proved plus probable reserves were reported for each of the five existing L53/48 fields totaling 1,548,000 barrels (57% of December 31, 2018 proved plus probable reserves).Net present value (after tax) of Thailand proved plus probable oil reserves at December 31, 2019, using forecast prices and costs discounted at 10% per year, of Cdn$87.4 million. The 11% increase in the net present value (after tax) of Thailand proved plus probable oil reserves from $79.0 million at December 31, 2018 is the result of positive technical revisions (primarily at the L53-DD field) and discovery of the L53-AA South field resulting in a 34% increase in proved plus probable oil reserves, partially offset by a 5.3% decrease in average oil sales prices.
º Given the early stage development of the 2018 L53-DD oil discovery, the Company requested the inclusion of possible oil reserves at December 31, 2018 and December 31, 2019 in order to better define the potential upside of the field. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
º Possible oil reserves increased 25% to 3,909,000 barrels at December 31, 2019 from 3,122,000 barrels at December 31, 2018. Total proven plus probable plus possible oil reserves (“3P”) are 7,577,000 barrels at December 31, 2019 with a net present value (after tax) using forecast prices and costs discounted at 10% per year, of Cdn$157.0 million.
º Thailand Concession L53/48 reserves are from conventional sandstone reservoirs.Net to Pan Orient’s 50.01% equity interest in POS:
º Pan Orient does not have any direct interest in, or control over, the crude oil reserves or operations of on-shore Concession L53/48. The values at December 31, 2019 identified as “Net to Pan Orient’s 50.01% Equity Interest in Pan Orient Energy (Siam) Ltd.” represent 50.01% of POS reserves and values.
º Net to Pan Orient’s 50.01% equity interest in POS, proved plus probable crude oil reserves of 1,834,000 barrels at December 31, 2019. Net to Pan Orient’s 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable crude oil reserves at December 31, 2019, using forecast prices and costs discounted at 10% per year, of Cdn$43.7 million, or $0.80 per Pan Orient share based on the current 54.5 million Pan Orient shares outstanding.
º Net to Pan Orient’s 50.01% equity interest in POS, proved plus probable plus possible crude oil reserves of 3,789,000 barrels at December 31, 2019. Net to Pan Orient’s 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable plus possible crude oil reserves at December 31, 2019, using forecast prices and costs discounted at 10% per year, of Cdn$78.5 million, or $1.44 per Pan Orient share based on the current 54.5 million Pan Orient shares outstanding.
Note: Per share values were calculated based on 54,496,007 Pan Orient shares currently outstanding
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as “expect”, “believe”, “estimate”, “should”, “anticipate” and “potential” or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: estimates of reserves and the net present value of those reserves, anticipated future production performance, estimates of future crude oil reference prices and the percentage of those prices received by Pan Orient, and estimates of development costs, foreign exchange rates, inflation rates, taxes and well abandonment and disconnect costs. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.Neither 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, PLEASE CONTACT:
Pan Orient Energy Corp.
Jeff Chisholm, President and CEO (located in Bangkok, Thailand)
Email: [email protected]– or –Bill Ostlund, Vice President Finance and CFO
Telephone: (403) 294-1770
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