TIDMNGP
RNS Number : 9234Q
Niche Group (The) PLC
27 October 2011
Embargoed: 0700hrs, 27 October 2011
The Niche Group plc
("Niche" or the "Company")
New Competent Person's Report
Shows NPV10 of US$583.4 Million Net to Oman Resources
Raises Best Estimate Reserves by 269% to 46.5 Bcf gas Net to
Oman Resources
Niche, the AIM listed investment company with interests in oil
and gas exploration and development activities onshore Turkey, is
pleased to issue the results of a new Competent Person's Report
("CPR") by Senergy (GB) Ltd ("Senergy") on Blocks AR/ARR/4396,
AR/ARR/4395 and AR/ARR/4394 (together the "Hatay Blocks"), in which
Oman Resources ("Oman") has acquired a 50% equity interest. Niche
holds loan notes convertible into a 35.7% shareholding in Oman.
Highlights
-- Best estimate Reserves up 269% on Hatay Block 4396 to 46.5
Bcf gas recoverable net to Oman following Senergy's upgrade of
Prospective Resources to Reserves
-- Best estimate Prospective Resources across Oman's Hatay
Blocks 4395 & 4394 up 59% to 63.4 Bcf gas recoverable net to
Oman
-- Best estimate combined Reserves + Resources across the Hatay
Blocks up 99% to 109.9 Bcf gas recoverable net to Oman
-- Best estimate Reserves, Contingent and Prospective Resources
across Oman's portfolio now stand at 259.4 Bcf gas recoverable net
to Oman (previously 162 Bcf)
-- Best estimate NPV10 attributable Reserves, un-risked
Contingent Resources and Prospective Resources across Oman's
portfolio now stands at US$583.4 million net to Oman
The new CPR, issued on the Hatay Blocks only at present,
identified considerable additional recoverable Reserves and
prospective Resources net to Oman resulting from the interpretation
and integration of recently purchased vintage 2D seismic data on
the Hatay Blocks. Such interpretation has significantly improved
the understanding and definition of trap geometries and closures on
the Hatay Blocks. This enabled Senergy to upgrade Prospective
Resources on Hatay Block 4396 to Reserves. Oman Resources is also
expecting a further updated CPR to be issued by Senergy on Konya
Block 4077, subject to successful flow testing operations which
remain underway.
A full summary of current recoverable Reserves and Prospective
Resources across Oman's Hatay licences is shown below:
Total Recoverable Gas Reserves (Bscf): Hatay Block 4396
Gross on Licence Net to Oman Resources
--------- ------------------------------------- -------------------------------------
Proved Proved+ Proved+Probable Proved Proved+ Proved+Probable
Probable +Possible Probable +Possible
--------- ------- ---------- ---------------- ------- ---------- ----------------
Licence
4396 8.3 92.9 216.4 4.2 46.5 108.8
--------- ------- ---------- ---------------- ------- ---------- ----------------
Total Recoverable Gas Prospective Resources (Bscf): Hatay Blocks
4394, 4395, 4396
Gross on Licence Net to Oman Resources
--------- ---------------------------------- ----------------------------------
Low Best High Low Best High
Estimate Estimate Estimate Estimate Estimate Estimate
--------- ---------- ---------- ---------- ---------- ---------- ----------
Licence
4394 9.2 55.6 123.3 4.7 27.9 61.7
--------- ---------- ---------- ---------- ---------- ---------- ----------
Licence
4395 7 71.2 166.2 3.5 35.7 83.2
--------- ---------- ---------- ---------- ---------- ---------- ----------
Licence - - - - - -
4396
--------- ---------- ---------- ---------- ---------- ---------- ----------
Total 16.2 126.8 289.5 8.1 63.4 144.8
--------- ---------- ---------- ---------- ---------- ---------- ----------
N.b.: Total Gas is the arithmetic sum of the individual
reservoirs. Totals may not sum exactly due to rounding to one
decimal place
Block 4396 contains the Hamam-1 well, the first well on Oman's
assets to produce gas to an onsite compressed natural gas bottling
plant, selling to local gas markets at present in small volumes.
The Operator has submitted its application for construction of the
30km pipeline tie-in to the main existing network. BOTAS pipeline
pricing for natural gas was US$8.5/mcf. The Hamam-1 well tested
earlier this year with a stabilised flow rate of 3.5mmcf/gas per
day.
Recoverable Resources and Economics
The technically recoverable volumes presented in the CPR are
based on a review of the independent interpretations conducted on
the assets.
The preliminary development plans for the Hatay Blocks include
additional seismic acquisition and processing, exploration and
development drilling and the development of local oil and gas
handling facilities, CNG bottling facilities and gas pipelines into
the transmission network. Owing to the shallowness of the gas
reservoirs, the quality of the produced gas and the closeness of
the transportation infrastructure, the cost to commercialise the
gas is modest and relatively small resources can be produced and
marketed commercially. Test production from Hamam-1 has been
ongoing since April 2011 and ARAR is offering the produced gas into
the local CNG market.
The Turkish gas market has increased substantially in the last
decade. The vast majority of gas is imported with local production
accounting for only 2% of consumption in 2010. The Turkish oil and
gas infrastructure is adequately developed. Turkish wholesale gas
prices, petroleum regulation and fiscal regime are attractive for
local producers. Oil consumption has been relatively stable in
Turkey and local production provides less than 10% of total
consumption. The government encourages local exploration and
production, for instance by fiscal stimuli. High oil product prices
and the fact that refineries are required to buy all local produced
crude make Turkey an attractive market for oil producers.
A cash flow analysis has been undertaken in respect of Oman
Resources' net attributable resources (after deduction of royalties
and taxes). The Net Present Value (NPV) at 10% discount factor has
been calculated on the basis of hypothetical development plans and
related production profiles for the Hatay Reserves and,
additionally, the NPV for the Konya Block 4077 Contingent Resources
is shown below.
Net Attributable NPV (10%) Reserves ($MM)
Asset Proved Proved plus Proved plus
Probable Probable
plus Possible
--------------------- ------- ------------ ---------------
AR/ARR/4396 (Hatay) 8.7 140.9 334.9
--------------------- ------- ------------ ---------------
Total ($MM) 8.7 140.9 334.9
--------------------- ------- ------------ ---------------
Net Un-Risked Attributable NPV (10%) Contingent Resources
($MM)
Asset 1C 2C 3C
--------------------- ----- ------ ------
AR/ARR/4077 (Konya) 11.8 135.3 377.8
--------------------- ----- ------ ------
Total ($MM) 11.8 135.3 377.8
--------------------- ----- ------ ------
For the quantified Prospective Resources average NPVs per unit
($/Mscf for gas, $/bbl for oil) that are representative for the
specific fields have been multiplied with the resource volumes to
arrive at un-risked NPVs as per the table below.
Net Un-Risked Attributable NPV (10%) Prospective Resources
($MM)
Asset Low Best High
---------------------- ----- ------ ------
AR/ARR/4077 (Konya) 9.3 123.3 351.5
---------------------- ----- ------ ------
AR/ARR/4394 and 4395
(Hatay) 23.4 183.9 419.8
---------------------- ----- ------ ------
Total ($MM) 32.7 307.2 771.3
---------------------- ----- ------ ------
Commenting on the new CPR, Nigel Little, Chairman of Niche
Group, said,
"Niche is delighted to report the considerably upgraded
recoverable Reserves net to Oman Resources on Block 4396, together
with substantial recoverable Resources upgrades. With a convertible
interest in Oman of 35.7% this report strongly underpins the value
proposition of Oman. With Reserves currently reported on only one
of Oman's four blocks, and significant progress being made to
understand the reservoir potential across the assets and bring
wells into production, we are confident of further substantial
upgrades in recoverable Reserves, such that Oman Resources with its
partner, ARAR, will transform Turkey's recoverable gas
volumes."
Enquiries:
The Niche Group plc
Nigel Little
Tel. +44 (0) 20 7399 4371
M: Communications
Patrick d'Ancona / Ben Simons
Tel. +44 (0)20 7920 2340
Daniel Stewart & Co. Plc - Nominated Advisor and Joint
Broker
Oliver Rigby
Tel. +44 (0)20 7776 6550
Canaccord Genuity - Joint Broker
Charles Berkeley / Henry Fitzgerald-O'Connor
Tel: +44 (0) 20 7050 6500
Note:
The above information was approved by Enzo Zappaterra, Chief
Geologist of Oman Resources, who is a Fellow of The Geological
Society and a Certified Petroleum Geologist of the American
Association of Petroleum Geologists, Division of Professional
Affairs, with over 35 years experience in petroleum exploration and
management.
Standards Applied
In compiling this report Senergy has used the definitions and
guidelines set out in the 2007 Petroleum Resources Management
System prepared by the Oil and Gas Reserves Committee of the
Society of Petroleum Engineers (SPE) and reviewed and jointly
sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG) and the Society of
Petroleum Evaluation Engineers (SPEE). The results of this work
have been presented in accordance with the requirements of AIM, a
Market operated by the London Stock Exchange, in particular as
described in the "Note for Mining and Oil and Gas Companies - June
2009".
This information is provided by RNS
The company news service from the London Stock Exchange
END
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