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CALGARY, ALBERTA--(Marketwire - Oct. 24, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Golconda Resources Ltd. (the "Corporation" or "Golconda") (TSX VENTURE:GA) is pleased to provide the following information regarding the independent reserves assessment and evaluation of Golconda's proposed 25% working interest in approximately 1,600 acres of Cold Lake First Nation lands (the "Lands"), which are the subject of the previously announced joint venture among the Corporation, a Calgary based private oil and gas company ("PrivateCo") and Tri-Rez Ebay Energy Ltd. ("TRE") with respect to oil and gas exploration and development (the "Joint Venture"). The evaluation was conducted by GLJ Petroleum Consultants Ltd. ("GLJ"), effective as at August 31, 2012 and was conducted pursuant to National Instrument 51-101 -Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE") reserves definitions.
Pursuant to the Joint Venture agreement, TRE has agreed with Golconda and PrivateCo (collectively, the "Farmees") to acquire from Indian Oil and Gas Canada ("IOGC") a lease (the "Lease") covering the Lands. The Farmees have agreed to a ten (10) well work program over a period of three (3) years, which shall consist of the Farmees drilling a minimum of three (3) wells prior to the end of the first year of the Lease, a minimum of four (4) wells prior to the end of the second year of the Lease and a minimum of three (3) additional wells prior to the end of the third year of the Lease. The Farmees will each earn a 25% working interest in each successfully drilled or abandoned well.
RESERVES INFORMATION
The following table summarizes Golconda's proposed working interest in the oil reserves on the Lands effective as of August 31, 2012 as evaluated by GLJ.
| | Light and Medium Oil | Heavy Oil | Natural Gas Liquids | Total Oil Equivalent(3) |
| RESERVES | Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) |
| CATEGORY | (MMcf) | (MMcf) | (Mbbls) | (Mbbls) | (Mbbls) | (Mbbls) | (Mboe) | (Mboe) |
| PROVED | | | | | | | | |
| | Producing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | Developed Non-producing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | Undeveloped | 0 | 0 | 112 | 87 | 0 | 0 | 112 | 87 |
| TOTAL PROVED | 0 | 0 | 112 | 87 | 0 | 0 | 112 | 87 |
| TOTAL PROBABLE | 0 | 0 | 197 | 149 | 0 | 0 | 197 | 149 |
| TOTAL PROVED PLUS PROBABLE | 0 | 0 | 309 | 236 | 0 | 0 | 309 | 236 |
| Notes: |
| (1) | "Gross" Company reserves are the Company's total working interest share before the deduction of any royalties and without including any royalty interests of the Company. |
| (2) | "Net" reserves are the Company's working interest share after deduction of royalties but including royalty interests of the Company. |
| (3) | In the case of BOEs, using BOEs derived by converting gas to oil equivalent in the ratio of six thousand cubic feet of gas to one barrel of oil (6 MCF:1 bbl). See "Reader Advisory - BOE Presentation" and "Reader Advisory - Information Regarding Disclosure on Oil and Gas Reserves" below. |
The following table summarizes the Net Present Value of Golconda's share of oil as reserves effective as at August 31, 2012.
| | NET PRESENT VALUES OF FUTURE NET REVENUE BEFORE INCOME TAXES DISCOUNTED AT (%/year) | UNIT VALUE
BEFORE INCOME TAXES DISCOUNTED AT 10%/YEAR |
| RESERVES CATEGORY | 0%
(M$) | 5%
(M$) | 10%
(M$) | 15%
(M$) | 20%
(M$) | ($/BOE) | ($/Mcfe) |
| PROVED: | | | | | | | |
| | Developed Producing | 0 | 0 | 0 | 0 | 0 | 0.00 | 0.00 |
| | Developed Non-Producing | 0 | 0 | 0 | 0 | 0 | 0.00 | 0.00 |
| | Undeveloped | 2,301 | 1,860 | 1,538 | 1,297 | 1,111 | 17.66 | 2.94 |
| TOTAL PROVED(1)(2) | 2,301 | 1,860 | 1,538 | 1,297 | 1,111 | 17.66 | 2.94 |
| TOTAL PROBABLE(1)(2) | 4,308 | 3,373 | 2,746 | 2,306 | 1,984 | 18.43 | 3.07 |
| TOTAL PROVED PLUS PROBABLE(1)(2) | 6,609 | 5,233 | 4,284 | 3,603 | 3,095 | 18.14 | 3.02 |
| Notes: |
| (1) | Forecast pricing used is based on GLJ published price forecasts effective July 1, 2012. |
| (2) | It should not be assumed that the net present values of future net revenues estimated by GLJ represent fair market value of the reserves. There is no assurance that the forecast price and cost assumptions will be attained and variances could be material. See "Reader Advisory - Information Regarding Disclosure on Oil and Gas Reserves" below. |
Trading in the shares of Golconda on the TSX Venture Exchange will resume at the opening of market on Friday October 26, 2012.