NOVATEK announced that DeGolyer and MacNaughton (D&M) have completed their comprehensive reserve appraisals of the Company’s oil and gas reserves as of 31 December 2007. The Company added approximately 220 million barrels of oil equivalent (boe) of proved reserves under SEC1 standards, inclusive of 2007 production, and produced approximately 206 million boe2 during the year.
Estimated total proved reserves (SEC) as of 31 December 2007 increased to 4,678 million boe from 4,664 million boe as of year-end 2006. Total proved reserves of natural gas increased from 651 billion cubic meters (bcm) in 2006 to 653 bcm in 2007, an increase of 31 bcm, inclusive of 2007 production. Of significant importance was the growth in proved producing reserves of 304 million boe (not including production), or 9%, over 2006. In 2007, on a barrel of oil equivalent basis, NOVATEK replaced 107 percent of its production volumes from the appraised fields, or 158 percent over a five-year period (2003 to 2007), and at year-end 2007, the Company’s reserve to production ratio (or R/P ratio) is 23 years.
During 2007, for the first time, NOVATEK appraised its reserves under the PRMS reserve reporting standard which was approved in March 2007 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologist, and the Society of Petroleum Evaluation Engineers. The Company will cease reporting reserves under the previous proved and probable (P2) reserve methodology and adopt the new PRMS reserve standards for reporting proved and probable reserves. The Company will maintain reporting SEC proved reserves for financial reporting purposes.
Under this PRMS reserve reporting methodology, the Company’s proved reserves totaled 5,100 million boe as compared to 4,678 million boe under the SEC reserve case.
NOVATEK’s proved and probable reserves increased from 7,445 million boe at year-end 2006 (under the previous reserve methodology) to 7,562 million boe (PRMS) at year-end 2007. The Company’s estimated proved plus probable natural gas reserves, commonly referred to as “P2”, totalled 1,029 bcm in 2007 as compared to 1,015 bcm in 2006, while proved and probable liquids reserves increased by approximately 2,5 million tons year-on-year.
Source: NOVATEK
