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CALGARY, Dec. 6 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") (TSXV: NVS) is pleased to announce that Sproule Associates Limited ("Sproule"), an independent engineering and geological consulting firm and a qualified reserves evaluator, has provided Novus with an independent Contingent Resource Assessment (the "Report") for the Company's Dodsland Saskatchewan area Viking light oil assets. The intent of the Report was to independently assess the contingent resource potential of the Company's Dodsland Viking oil assets.
The Report, effective as at November 30, 2010, is in accordance with section 5.9 of National Instrument 51-101 ("NI 51-101") - "Standards of Disclosure for Oil and Gas Activities" and reports a "best estimate" of Discovered Petroleum Initially-In-Place ("DPIIP"), both as defined in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). The DPIIP on Novus working interest and option lands totals 559.5 Million Barrels ("MMSTB") of light Viking oil, consisting of 383.2 MMSTB gross working interest DPIIP and an additional 176.3 MMSTB on currently unearned lands under option to Novus. The DPIIP is based on geological well control, existing vertical and horizontal well production, and drilling results to date. In the Report, approximately 50% of the net acreage controlled by Novus (40.53 net sections owned and 13.53 net sections under option) was recognized by Sproule as containing discovered resources. No attempt was made to estimate contingent natural gas or natural gas by-product resources on the Company lands.
A Summary of the report is included in the table below:
<< CONTINGENT RESOURCES DPIIP Low Best High Estimate Estimate Estimate (P90) (P50) (P10) (mmstb) (mmstb) (mmstb) (mmstb) Novus Working Interest Lands 7.2 14.7 28.6 383.2 Novus Option Lands 3.8 7.7 15.0 176.3 Total Resources 11.0 22.4 43.6 559.5 Average Recovery Factor 2.1% 4.3% 8.4% n/a Note: DPIIP volume includes lands that had previously been assigned reserves, as of Dec. 31, 2009. >>
Hugh Ross, President and CEO of Novus commenting on the Report, indicated that, "We are very pleased to provide our shareholders with an independent assessment of the potential of our core Dodsland area property. This resource estimate of 559.5 Million Barrels ("MMSTB") establishes a significant opportunity for the Company to add future production and reserves in the area using current horizontal well technology. Novus also believes that the development of the Viking resource is in its early stages and that there is further upside to the recovery factors by applying secondary recovery methods that have not yet been implemented. Novus shall continue its efforts to actively drill on its existing land base in the Dodsland area, and shall remain focused on expanding its presence within this large oil resource play. Future drilling operations on these lands and other remaining lands not included in the Report are expected to increase the DPIIP estimates in the future. This resource assessment demonstrates the significant success we have achieved to date and demonstrates a compelling opportunity for the Company to add significant reserves through improvements in recovery factors. Given the large oil resource the Company possesses, the magnitude of even minor improvements in recovery factors to the Company is great. Novus has successfully transitioned itself into a Company with a large oil resource asset base, and has the opportunity base to provide it with years of lower risk oil drilling opportunities."
It should be noted that given the early stages of development, the best estimate of DPIIP may change in the future with further exploration and development activity. Additional drilling, testing and development are required to confirm economic development and ultimate recovery factors in the play. The resource estimates provided herein are estimates only and the actual resources may be greater or less than the estimates provided herein.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus intends to continue its strategy of growth through a targeted acquisition and consolidation strategy coupled with development and exploration drilling. Novus' current financial position and unused lines of credit will allow for the exploitation of its drilling inventory and expansion of the Company's opportunity suite through internally generated prospects and strategic light oil acquisitions.
Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 166.4 million common shares outstanding.