(JEC) TSX
CALGARY, Nov. 6 /CNW/ - Jura Energy Corporation ("Jura" or the "Company")
announces that the Company has entered into a purchase and sale agreement to
acquire producing oil and gas assets in Pakistan. Jura also announces the
results of a third party reserve report on the Kandra Gas Field and clarifies
the Company's listing status.
Pyramid Acquisition
Jura has signed a Share Purchase Agreement, to acquire, together with
Petroleum Exploration (Pvt.) Limited ("PEL"), all of the issued and
outstanding shares of Pyramid Energy International Inc. ("Pyramid") from Asia
Resources Oil Ltd. and Industrial Support Limited. Pursuant to the terms of
the Share Purchase Agreement between the parties, Jura will acquire 66.66% of
the shares of Pyramid and PEL will acquire 33.33% of the shares.
Pyramid's only asset is a 15.7895% interest in Block 22, which is
situated in the Central Gas Basin in Pakistan. The Block 22 assets comprise
three gas fields, Hasan, Khanpur and Sadiq, together with the Hamza appraisal
area. The fields are currently producing approximately 16 MMcf/d of gas into a
processing facility located adjacent to the Hasan Field from where it is
delivered and sold to the Sui Northern Gas Pipeline Ltd. Two new production
wells have been budgeted and are currently scheduled to be drilled in the
first half of 2007. Block 22 is operated by PEL. Jura's portion of the
budgeted costs for the drilling of these production wells is U.S.$421,000,
assuming the acquisition is completed.
The consideration for Jura's interest in Pyramid is approximately US$4.8
million in cash, plus US$1,106,700 in common shares of Jura. Completion of the
transaction is subject to TSX approval and to approval of the Government and
State Bank of Pakistan, as well as other customary closing conditions. Jura
currently expects the closing of the transaction to occur within 60 days.
Jura's President and CEO, Nigel McCue, said "we are extremely pleased to
have entered into an agreement to acquire these assets which, when the
transaction is completed, will represent our first production in Pakistan. We
expect to receive a significant increase in production from the two new wells;
in addition we believe further appraisal upside exists in the Block. These
assets also complement our existing exploration, appraisal and development
projects in Pakistan."
Update on Kandra Gas Field
On June 2, 2006, Jura announced that it would commission a technical
report in compliance with National Instrument 51-101 in respect of the
Company's 37.5% participating interest in the Kandra Gas Field. McDaniel &
Associates Consultants Ltd, Calgary, ("McDaniel") was retained and has
completed the technical report.
The net gas reserves of 109,165 MMcf to the end of the lease and 240,175
MMcf to the end of field life, as reported by McDaniel, confirm management's
initial estimates and significantly exceed the reserves required as a
feedstock for the Company's planned electrical power project. However,
McDaniel was unable to classify any of the gas reserves as proved as the
Company has not presently entered into a definitive gas sales contract with a
gas purchaser. In line with management expectations, the pre-tax net present
value of the probable reserves is marginal at a 5% discount rate due to low
forecast natural gas prices associated with production from the Kandra Gas
Field and the capital costs associated with the development and production
from these wells.
The profitability of the planned electrical power facility, to which
production from the Kandra Gas Field would be tied, has always been viewed as
the accretive aspect of the development of the Kandra Gas Field. This is due
to the more favourable pricing regime for electricity sales in Pakistan.
Gas prices in Pakistan are regulated by the government. Pricing is
determined by a formula with reference to the price of oil, capped at U.S.$36
per barrel, and adjustments for BTU content. For the purposes of the mentioned
pre-tax NPV, McDaniel assumed a price of US$2.35/Mmbtu.
A summary of the McDaniel report follows:
ESTIMATED COMPANY SHARE OF REMAINING RESERVES AS OF SEPTEMBER 30, 2006
MMCF
<<
Total Total
Proved plus Proved
-------------------------------------------------------------------------
Total Probable Probable Possible plus Probable
Proved Additional Additional Additional plus Possible
Natural Gas
Gross (1) - 118,715 118,715 65,410 184,124
Net (2) - 109,165 109,165 57,398 166,563
(1) Gross reserves include the working interest reserves before
deductions of royalties payable to others.
(2) Net reserves include gross reserves after royalties payable to others
plus royalty interest reserves.
ESTIMATED COMPANY SHARE OF NET PRESENT VALUES AS OF SEPTEMBER 30, 2006
$1000 U.S. (1) (2) (3)
Discounted At
0% 5% 10% 15% 20%
-------------------------------------------------------------------------
Before Income Taxes
Total Proved Reserves - - - - -
Probable Reserves 53,835 14,700 -1,825 -9,397 -13,074
Total Proved & Probable
Reserves 53,835 14,700 -1,825 -9,397 -13,074
Possible Reserves 86,478 38,540 19,069 10,449 6,303
Total Proved & Probable
& Possible Reserves 140,312 53,241 17,244 1,052 -6,771
After Income Taxes
Proved Reserves - - - - -
Probable Additional
Reserves 26,698 3,259 -7,041 -11,946 -14,398
Total Proved & Probable
Reserves 26,698 3,259 -7,041 -11,946 -14,398
Possible Reserves 44,650 20,170 10,281 5,914 3,804
Total Proved & Probable
& Possible Reserves 71,348 23,428 3,240 -6,032 -10,595
(1) Based on forecast prices and costs at September 30, 2006.
(2) Includes In-Country G&A costs but excludes interest expenses and
corporate overhead.
(3) The net present values may not necessarily represent the fair market
value of the reserves.
>>
Update on TSX Listing
As previously announced on August 4, 2006, following Jura's conversion to
an oil and gas company, the TSX had provided Jura until November 1, 2006 to
meet original listing requirements on the TSX and file a technical report
compliant with National Instrument 51-101 with respect to the Kandra Gas
Field. As discussed above, while Jura has discharged its obligations to file
the technical report, the Kandra reserves have been classified as probable and
possible by McDaniel due to the absence of a definitive gas sales agreement.
The reserves do not satisfy the original listing requirements of the TSX for
proved developed reserves.
As a result, the TSX has placed Jura's listing under review and provided
Jura 60 days in which to meet or exceed the original listing standards.
Failure to meet the standards by the expiry of the 60 day period will result
in delisting of Jura's common shares from the TSX, in which case Jura would
apply to the TSX Venture Exchange for listing there in the appropriate listing
category.
Management remains confident that it will exceed the original listing
standards within the 60 day period. Management has commissioned a National
Instrument 51-101 compliant technical report in respect of the Pyramid assets
from McDaniel and, based upon management's review of existing engineering and
other technical reports in relation to Pyramid, believes that the McDaniel
Report will support the characterization of sufficient proved reserves to
satisfy its obligations to the TSX.
About Jura:
Jura is based in Calgary, Alberta, and listed on the Toronto Stock
Exchange trading under the symbol JEC.
Forward-looking statements: This document contains statements about
expected or anticipated future events and financial results that are
forward-looking in nature and, as a result, are subject to certain risks and
uncertainties, such as general economic, market and business conditions, the
regulatory process and actions, technical issues, new legislation, competitive
and general economic factors and conditions, the uncertainties resulting from
potential delays or changes in plans, the occurrence of unexpected events, and
the Corporation's capability to execute and implement its future plans. Actual
results may differ materially from those projected by management. For such
statements, we claim the safe harbour for forward-looking statements within
the meaning of the Private Securities Legislation Reform Act of 1995.
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
