Addax News ... 1/16/2008
Addax Petroleum announces 2007 Year-End Reserves, Resources and 2007 Average Oil Production
Wednesday January 16, 7:31 am ET
<< - 2007 Reserve Replacement Ratio of 302 per cent and Reserve Life Index of 9.7 years - Year end 2007 Proved plus Probable oil reserves increase 26 per cent to 446.7 MMbbl - Year end 2007 unrisked prospective oil resources of 2,246 MMbbl (risked 738 MMbbl) - Year end 2007 contingent gas resources of 2,415 Bcf and 77.2 MMbbl of liquids >>
CALGARY, Jan. 16 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum" or the "Corporation") (TSX:AXC and LSE:AXC), today announces that its Board of Directors has accepted a reserve report prepared by Netherland, Sewell & Associates Inc., independent oil and natural gas reservoir engineers ("NSAI" and the "NSAI Report"), that evaluates all of the Corporation's petroleum reserves and certain resources. As at December 31, 2007, NSAI estimates gross working interest proved plus probable reserves for the Corporation to be 446.7 MMbbl, representing an increase of approximately 26 per cent over the quantities estimated by NSAI at the prior year-end. In addition, the Corporation produced an average of 125,940 bbl/d of oil during 2007, representing an increase of approximately 40 per cent over 2006 and close to the 2007 target of 127,000 bbl/day. Average oil production for 2007 included 104,510 bbl/d from Nigeria and 21,430 bbl/d from Gabon.
ADVERTISEMENT
This announcement coincides with the filing of a material change report by the Corporation which can be accessed through the Corporation's website at www.addaxpetroleum.com and through www.sedar.com. The reserve estimates in this release are based on forecast prices and costs. Except as otherwise indicated, references to "$" and to "dollars" refer to the currency of the United States of America.
CEO's Comment
Commenting today, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "I am pleased to report very strong operational results for 2007. Our production performance was outstanding, delivering 40 per cent growth over 2006. Strong production growth, combined with a favourable oil price environment, has allowed us to continue to invest in the growth of our reserves and resources base. I believe we have invested well and have delivered strong reserves growth in each of our operations areas, as laid out in our reserves disclosure. Growth in production and reserves has been complimented and balanced with increases in our prospective oil resources and contingent gas resources, providing a platform for continued future growth. I believe our 2007 success in growing our production and adding to our reserves and resources base represents a major accomplishment that Addax Petroleum has achieved for its shareholders and stakeholders."
The NSAI Report
The NSAI Report was prepared for the Corporation at the direction of Addax Petroleum's Technical and Reserves Committee, using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National Instrument 51-101. In addition to oil reserves on the Corporation's license areas, the NSAI Report includes prospective oil resources for the Corporation's license areas in West Africa and contingent gas resources for the Corporation's Nigeria license areas.
Selected Oil Reserves Highlights
Highlights of oil reserves reported in the NSAI Report and the
Corporation's 2007 production, with comparatives to 2006 results, are as
follows:
- Total gross working interest proved plus probable reserves increased
by approximately 26 per cent to 446.7 MMbbl as at December 31, 2007
from 353.7 MMbbl as at December 31, 2006. The Corporation did not
make reserves acquisitions or disposals in 2007 and the 2007 reserves
additions arise primarily from the Corporation's operational
activity, including extensions and discoveries, and favourable
economic factors.
- In Nigeria, gross working interest proved plus probable reserves
increased by approximately 22 per cent to 262.7 MMbbl as at
December 31, 2007 from 215.4 MMbbl as at December 31, 2006 and oil
production for 2007 averaged 104,510 bbl/d.
- In Gabon, gross working interest proved plus probable reserves
increased by approximately 11 per cent to 109.4 MMbbl as at
December 31, 2007 from 98.2 MMbbl as at December 31, 2006 and oil
production for 2007 averaged 21,430 bbl/d.
- In the Kurdistan Region of Iraq, gross working interest proved plus
probable reserves increased by approximately 86 per cent to
74.6 MMbbl as at December 31, 2007 from 40.1 MMbbl as at December 31,
2006, all of which are contained in the Taq Taq field. There was no
oil production from the Taq Taq field during 2007.
- The Corporation's overall 2007 reserves replacement ratio was 302 per
cent. The reserves replacement ratio is calculated by dividing the
gross working interest proved plus probable reserve additions of
139.0 MMbbl (before deduction of 2007 production of 46.0 MMbbl) by
the 2007 production.
- The Corporation's 2007 reserve life index, based on proved plus
probable reserves as at December 31, 2007 and average 2007 oil
production, has decreased slightly to 9.7 years from 10.8 in 2006.
The 2007 reserve life index is calculated by dividing the gross
working interest proved plus probable reserves of 446.7 MMbbl as at
December 31, 2007 by the 2007 production of 46.0 MMbbl. The
Corporation's oil production for December, 2007 averaged
143,600 bbl/day and included 117,200 bbl/day in Nigeria and
26,400 bbl/day in Gabon.
- Total gross working interest proved plus probable plus possible
reserves have increased by 21 per cent to 580.3 MMbbl as at
December 31, 2006 from 480.4 MMbbl as at December 31, 2006.
The following table summarises selected reserves information as at
December 31, 2007:
Oil Reserves and Future Net Revenues
based on Forecast Prices and Costs as at December 31, 2007
-------------------------------------------------------------------------
Estimated
NPV10% of
Future Net
Revenue
Gross Working Interest Reserves After Tax
--------------------------------- ------------
Proved
plus
Proved Probable Proved
plus plus plus
Proved Probable Possible Probable
--------------------------------- ------------
(MMbbl) (MMbbl) (MMbbl) ($million)
Nigeria 154.2 262.7 348.7 3,659
Gabon 79.1 109.4 128.2 2,099
Kurdistan Region of Iraq - 74.6 103.4 640
Total 233.3 446.7 580.3 6,398
The following table reconciles changes in gross working interest proved
plus probable reserves:
Reconciliation of the Corporation's Reserves
based on Forecast Prices and Costs
-------------------------------------------------------------------------
Gross Working Interest
Proved plus Probable Reserves
-------------------------------
(MMbbl)
Estimated as at December 31, 2006 353.7
Acquisitions net of Disposals 0.0
Discoveries and Extensions 40.8
Technical Revisions 66.0
Economic Factors 32.2
Production (46.0)
Estimated as at December 31, 2007 446.7
Selected Prospective Oil Resources Highlights
Highlights of prospective oil resources reported in the NSAI Report, with
comparatives to 2006 results, are as follows:
- Prospective oil resources were reported for the majority of the
Corporation's license areas in West Africa, including the recently
acquired JDZ Block 1. Prospective oil resources were not reported for
the Taq Taq license area in the Kurdistan Region of Iraq and the
majority of the Corporation's license areas onshore Gabon. In each
instance, data collection and evaluation at year-end 2007 were
insufficiently advanced to identify prospective resources.
- Total gross working interest best estimate unrisked prospective oil
resources were 2,246 MMbbl as at December 31, 2007. Risked
prospective oil resources increased by approximately 10 per cent to
738 MMbbl as at December 31, 2007 from 670 MMbbl as at December 31,
2006.
- Of the year-end 2007 risked prospective oil resources, 476 MMbbl or
64 per cent relate to the Corporation's Deep Water Gulf of Guinea
portfolio, 210 MMbbl or 28 per cent to onshore Nigeria and shallow
water offshore Nigeria and Cameroon, and 51 MMbbl or 8 per cent to
Gabon, predominantly offshore.
The following table summarises selected prospective oil resources
information as at December 31, 2007:
Estimates of the Corporation's Prospective Oil
Resources in West Africa as at December 31, 2007
-------------------------------------------------------------------------
Best Estimate
Prospective Oil Resources
-------------------------
Unrisked Risked
(MMbbl) (MMbbl)
Shallow water and onshore Nigeria
OML123 401 110
OML124 82 16
OML126 250 37
OML137 74 15
Sub-total 807 178
Shallow water Cameroon
Ngosso 100 32
Sub-total 100 32
Deep Water Gulf of Guinea
JDZ (1, 2, 3 & 4) 727 313
OPL291, Nigeria 477 163
Sub-total 1,204 476
Gabon
Onshore 31 8
Offshore 105 43
Sub-total 136 51
-------------------------------------------------------------------------
Total 2,246 738
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-------------------------------------------------------------------------
Totals may not add because of rounding
Selected Contingent Gas Resources Highlights
Highlights of contingent gas resources reported in the NSAI Report, with
comparatives to 2006 results, are as follows:
- Contingent gas resources reported are limited to the Corporation's
producing license areas in the shallow water and onshore license
areas in Nigeria only. They are categorized as contingent because the
commerciality of the gas resources and the Corporation's rights to
produce the gas resources have yet to be established. The Corporation
is presently formulating commercial development proposals these
contingent gas resources.
- Total gross working interest best estimate contingent gas resources
increased by approximately 71 per cent to 2,415 Bcf as at
December 31, 2007 from 1,412 Bcf as at December 31, 2006. Best
estimate liquids associated with contingent gas resources increased
by approximately 106 per cent to 77.2 MMbbl as at December 31, 2007
from 37.4 MMbbl as at December 31, 2006.
- The largest additions are in OML137 where 926 Bcf and 25.3 MMbbl were
added arising from the Corporation's successful exploration efforts
during 2007.
The following table summarises selected contingent gas resources
information as at December 31, 2007, including associated gas liquids
quantities:
Estimates of the Corporation's Contingent
Gas Resources in Nigeria as at December 31, 2007
-------------------------------------------------------------------------
Contingent Gas Resources(1) Associated Gas Liquids(2)
(Bcf) (MMbbl)
-------------------------------------------------------------------------
OML123 1,000 27.9
OML124 381 22.2
OML126 106 1.8
OML137 926 25.3
Okwok 2 0.0
-------------------------------------------------------------------------
Total 2,415 77.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) after deductions for plant fuel and extraction of gas liquids
(2) includes LPG and C5+
About Addax Petroleum
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa and has increased its crude oil production from an average of 8,800 bbl/d for 1998 to an average of approximately 126,000 bbl/d for 2007. Further information about Addax Petroleum is available at www.addaxpetroleum.com or at www.sedar.com.
