Reserves and Operational Update (1510P)
29 September 2011 - 4:01PM
UK Regulatory
TIDMRSOX
RNS Number : 1510P
Resaca Exploitation Inc
29 September 2011
for IMMEDIATE release 29 SEPTEMBER 2011
Resaca Exploitation, Inc.
("Resaca" or "the Company")
Reserves and Operational Update
Resaca (AIM: RSOX), the oil and natural gas production,
exploitation, and development company focused on the Permian Basin
in the USA, is pleased to announce an updated reserve study as of
30 June 2011 for the Company's oil and gas properties and to
provide an update on the Company's production.
Reserves Update
As of 30 June 2011, Resaca's proved and probable ("2P") reserves
were 27.5 million barrels ("MMbbls") of oil and 14.5 billion cubic
feet ("Bcf") of natural gas, for a total of 29.9 million barrels of
oil equivalent ("MMboe"). This represents 0.2 MMboe increase in
Resaca's 2P reserves since 30 June 2010 after realization of 0.2
MMboe of production during the fiscal year ended 30 June 2011. The
Company's proved reserves represented 49% of the 2P reserves as of
30 June 2011. Additionally, Resaca's possible reserves were 5.4
MMbbls of oil and 3.3 Bcf of natural gas as of 30 June 2011 for
total proved, probable and possible ("3P") reserves of 32.9 MMbbls
of oil and 17.8 Bcf of natural gas (35.8 MMboe). Resaca's 3P
reserves increased 0.009 MMboe since 30 June 2010. All reserves are
calculated on a net revenue interest basis (working interest
volumes, less royalties).
Resaca's proved developed producing ("PDP") reserves as of 30
June 2011 were 2.8 MMbbls of oil and 2.5 Bcf of natural gas, for a
for a total of 3.2 MMboe. This represents a 0.5 MMboe increase in
PDP reserves since 30 June 2010 after realization of 0.2 MMboe of
production during the fiscal year ended 30 June 2011. This
represents a 20 percent increase in PDP reserves, after
consideration of fiscal year production. The increase in PDP
reserves is primarily attributable to the capital expenditure
program initiated by the Company in February 2011 on the Company's
Cooper Jal Unit, the Jordan San Andres Unit, and the Edwards
Grayburg Unit.
Resaca commissioned Haas Petroleum Engineering Services, Inc.
("Haas") to prepare a reserve report for its primary and secondary
recovery (water injection) reserves and Williamson Petroleum
Consultants, Inc. ("Williamson") to prepare a reserve report
considering only those additional reserves which could be recovered
through tertiary recovery (CO(2) injection). Together, these
reports provide a complete analysis of Resaca's reserves. Details
of the reports are set out in the table below.
NPV @10%
Natural Discount
Oil Gas $MM
(MMbbls) (Bcf) MMboe (Pre-Tax)
---------- -------- ------ -----------
Proved Reserves
Haas 12.6 12.4 14.6 $311.0
Williamson 0 0 0 0
---------- -------- ------ -----------
Total Proved Reserves 12.6 12.4 14.6 $311.0
========== ======== ====== ===========
Probable Reserves
Haas 2.0 2.1 2.4 $60.5
Williamson 12.9 0 12.9 122.2
---------- -------- ------ -----------
Total Probable Reserves 14.9 2.1 15.3 $182.7
========== ======== ====== ===========
Total 2P Reserves 27.5 14.5 29.9 $493.7
========== ======== ====== ===========
Possible Reserves
Haas 4.1 3.3 4.6 $93.3
Williamson 1.3 0 1.3 11.6
---------- -------- ------ -----------
Total Possible Reserves 5.4 3.3 5.9 $104.9
========== ======== ====== ===========
Total 3P Reserves 32.9 17.8 35.8 $598.6
========== ======== ====== ===========
The reserve estimates are based on the unweighted average
12-month prices as of 30 June 2011 under the revised SEC rules,
calculated as the unweighted arithmetic average of the
first-day-of-the-month oil and natural gas prices for each month
within the 12-month period ended 30 June 2011 of $90.09 per barrel
for oil and $4.21 per MMbtu for natural gas, and are further
adjusted by field for quality, transportation fees, and regional
price differentials. The reserves are calculated "before tax" and
consider the anticipated costs to develop and produce.
The Company's reserves estimates at 30 June 2011 include
reserves related to the Grand Clearfork Unit property, which the
Company sold on 15 July 2011 and do not reflect reserves associated
with the Langlie Jal Unit property, which the Company purchased on
5 August 2011.
Production Update
Resaca's seven-day average daily production as of 27 September
2011 was 747 boe per day.
Commenting on the reserves and production update, J.P. Bryan,
Chairman and CEO of Resaca, said:
"We are pleased with the results from the work performed at
Copper Jal, Jordan San Andres, and Edwards Grayburg, which are
reflected in our reserves as of 30 June 2011. We look forward to
further implementing our development plans on these properties.
As evidenced by our recent third party reserve report, we are
well positioned with a solid asset base of long-life, oil weighted
properties. Based on the PV10 value of our proved reserves alone,
Resaca has a net asset value in excess of $12 per share without
consideration of the increase in our reserves related to our
purchase of the Langlie Jal property, which is significantly higher
than our current stock price."
For further information please contact:
Resaca Exploitation, Inc.
J.P. Bryan, Chairman and Chief Executive
Officer +1 713-753-1300
John J. ("Jay") Lendrum, III, Vice Chairman +1 713-753-1400
Dennis Hammond, President and Chief
Operating Officer +1 713-753-1281
Chris Work, Chief Financial Officer +1 713-753-1406
Buchanan (Investor Relations) +44 (0)20 7466 5000
Tim Thompson
Helen Chan
Ben Romney
finnCap Limited (Nomad and Broker) + 44 (0) 20 7600 1658
Sarah Wharry, Corporate Finance
Victoria Bates, Corporate Broking
About Resaca
Resaca is an independent oil and gas development and production
company based in Houston, Texas. Resaca is focused on the
acquisition and exploitation of long-life oil and gas properties,
utilizing a variety of primary, secondary and tertiary recovery
techniques. Resaca's current properties are located in the Permian
Basin of West Texas and Southeast New Mexico. Additional
information is available at www.resacaexploitation.com.
In accordance with the AIM Rules, the information in this
announcement has been reviewed and approved by Dennis Hammond,
President. Mr. Hammond has a Bachelor of Science degree in
Petroleum Engineering, is a registered professional engineer in the
State of Texas, and has over 30 years relevant experience within
the sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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