Petroamerica Announces 2014 Year-End Reserves Increasing 2P Reserves Year-on-Year by 66%
18:19 EST Wednesday, February 25, 2015
CALGARY, Feb. 25, 2015 /CNW/ - Petroamerica Oil Corp. (TSX-V: PTA) ("Petroamerica" or the "Company"), is pleased to announce the results of its 2014 year-end independent reserves evaluation. All per barrel reserve figures reported below are Company Working Interest before royalty and on a barrels of oil equivalent ('boe') basis. All financial amounts are reported in United States dollars unless otherwise stated.
2014 Highlights:
- Record Company production of 2.3 million boe which is equivalent to 6,271 barrels of oil per day (Company working interest, before royalties) for 2014.
- Total Proved reserves growth of 42% from 3.1 million boe at year-end 2013 to 4.5 million boe at year-end 2014 (98% light to medium oil).
- Total Proved plus Probable ('2P') reserves growth of 66% from 4.9 million boe at year-end 2013 to 8.1 million boe at year-end 2014 (97% light to medium oil).
- Total Proved plus Probable plus Possible reserves growth of 95% from 6.7 million boe at year-end 2013 to 13.1 million boe at year-end 2014
- Increased Total 2P reserve life index from 2.1 years at year-end 2013 to 4.1 years at year-end 2014.
- Completed the strategic acquisition of Suroco Energy Inc. ('Suroco') adding considerable reserves growth across all categories and extending the reserves life of the Company.
2014 Year-End Company Interest Reserves
The Company's Colombian reserves were evaluated by independent qualified reserves evaluator, GLJ Petroleum Consultants Ltd. ("GLJ"), and the reserves summarized here are from the independent reserves report prepared by GLJ, with an effective date of December 31, 2014 (the "GLJ Report"). The GLJ Report was prepared in compliance with National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities) and in accordance with the definitions, standards and procedures of COGE (Canadian Oil and Gas Evaluation) Handbook. A complete filing of the Company's reserves as required by NI 51-101 will be filed on SEDAR with the Company's Annual Information Form.
The following table presents a summary of the Company's oil and gas reserves as of December 31, 2014.
2014 Year-End Reserves Summary (in thousands of boe)
| Reserves Category | 2013 | 2014 |
| Total Proved | 3,147 | 4,474 |
| Total Proved plus Probable | 4,891 | 8,133 |
| Total Proved plus Probable plus Possible | 6,717 | 13,124 |
The following table presents a summary of the Company's net present values of future cash flows as of December 31, 2013 and 2014.
2014 Year-End Reserves Net Present Value Summary (in millions)
| Reserves Category | 2013 | 2014 |
| Total Proved | $133.9 | $89.2 |
| Total Proved plus Probable | $194.8 | $175.9 |
| Total Proved plus Probable plus Possible | $260.0 | $309.4 |
| Note: Net present values before tax discounted at 10%, calculated using the GLJ January 2015 ICE Brent oil price forecast. Estimated values disclosed above do not necessarily represent fair market value. |
The oil price forecast used to calculate the net present values can be found on the GLJ website at www.gljpc.com.
Year-End Reserves Reconciliation (in thousands of boe)
| | Total Proved | Total Proved plus Probable | |
| December 31, 2013 | 3,147 | 4,891 | |
| Technical Revisions1 | 100 | (1,189) | |
| Extensions | - | - | |
| Exploration Discoveries2 | 192 | 544 | |
| Acquisitions3 | 3,324 | 6,176 | |
| Production | (2,289) | (2,289) | |
| December 31, 2014 | 4,474 | 8,133 | |
| 1. | Positive technical revisions were in Las Maracas Field (Proved), downward technical revisions include Las Maracas (Probable), La Casona, Balay, Rumi, and Curiara Fields. |
| 2. | A new exploration discovery was added at the Langur Field (Llanos 19 Block). |
| 3. | Acquisition of Suroco Energy in July, 2014, adding Putumayo Basin producing and exploration assets. |
Reserves Discussion
The Company's reserves are located in the Llanos and Putumayo Basins of Colombia.
The Company produced approximately 2.3 million boe during 2014 (98% oil), of which 2.0 million boe were produced from the Company's legacy Llanos assets, and 0.3 million boe were produced from the Putumayo assets that were acquired in 2014. On a 2P basis, with the acquisition of Suroco in mid-2014 and reserve additions from the Langur exploration discovery, the Company replaced approximately 1.5 times its production and more than offset any negative technical revisions.
On a per barrel basis, the calculated future net present value before tax, discounted at 10%, for the 2P reserves category is $21.63 per boe. The 2P reserve life index, calculated by dividing the total 2P reserve estimate by the forecasted 2P 2015 production volume, is 4.1 years.
Financial Update
The Company currently has approximately $53 million in cash and short-term investments, and using cash-on-hand, intends to pay off a $35 million Canadian dollar denominated debenture at maturity on April 19, 2015. In order to take advantage of a strong US dollar, the Company has purchased $30 million Canadian dollars for approximately US $24.6 million at an average exchange rate of US $0.8191 for each Canadian dollar. The Company plans to purchase the final $5 million Canadian dollar tranche prior to the debenture maturity date.
Additionally, the Company is currently engaged in advanced discussions with several parties to establish a new debt facility. It is expected that this new facility will be finalised and in place in the second quarter of 2015.
The Company has purchased puts for 3,000 barrels of oil per day at $50 per barrel ICE Brent for March through May 2015, effectively setting a price floor without limiting the upside in a volatile oil market.
The Company anticipates releasing its 2014 year-end financial statements, management discussion and analysis and annual information form in April of 2015.
Definitions of Reserve Categories
"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual quantities recovered will exceed the estimated proved reserves.
"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
"Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability quantities actually recovered will equal or exceed the sum of the proved plus probable plus possible reserves.
About Petroamerica:
Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA". A summary of the Company property holdings has been included in the current presentation located at www.PetroamericaOilCorp.com.
Forward Looking Statements: