CALGARY, Jan. 31 /CNW/ - Mystique Energy, Inc. ("Mystique") (TSXV: MYS) today announced that, as a result of its successful 2006 exploration drilling program, its proved plus probable ("P+P") reserves have almost tripled during 2006.
P+P reserves have increased 2.8 times (180 per cent) from 905 thousand barrels of oil equivalent ("Mboe") to 2,530 Mboe, after having produced 115 Mboe during 2006. Based on a year-end production rate of 550 barrels of oil equivalent per day ("boepd"), Mystique's P+P reserves life index ("RLI") is 12.6 years.
Proved reserves increased by 40 per cent from 595 Mboe to 835 Mboe. The addition of proved reserves replaced 2006 production by more than three times. Probable reserves increased more than five times from 310 Mboe to 1690 Mboe.
According to Mystique President Vic Luhowy, "The increase in our production from 220 boepd in January, 2006 to 550 boepd during December of 2006 reflects the increase in our proved reserves during 2006. The significant increase in our probable reserves (445 percent) sets the stage for continued growth in Mystique's future production that could result from our development drilling program. The higher probability of success associated with the lower risk development drilling program improves our potential for continued growth."
Mystique's reserves were evaluated by McDaniel & Associates Consultants Ltd., effective 2006-12-31. Details of the reserves report will be filed on SEDAR shortly.
Operations Update:
Mystique curtailed capital expenditures in early November of 2006 as it began a program to reduce its debt. Production has remained relatively stable at approximately 540 boepd, down slightly from a peak of over 550 boepd achieved during November, 2006.
One of the steps to reduce debt, the sale of the Garrington assets as announced in Mystique's press release of November 29, 2006, is expected to conclude in late February. The sale of Garrington would reduce Mystique's production by 90 boepd and proved reserves by 175 Mboe. The Garrington assets are not material to Mystique's future growth.
As a result of its successful exploration program completed in 2006, Mystique has developed four development drilling plays on its lands, with further regional extent and potential. Fifteen development drilling locations have been identified to date. Four locations have been licensed; applications to drill an additional three wells are being prepared.
In addition to its future development drilling program, Mystique has ready for commencement, a number of non-drilling projects to increase production as it completes its process to reduce debt. These projects include:
- recompleting one well in the Lochend area that was drilled in mid- 2006, - tying-in one well in the Wildcat Hills area that was drilled and completed in mid-2006 and production tested at approximately 115 boepd, and - completing and tying-in one well in the Lochend area that was drilled in mid-2006.
Completion of these three projects could add approximately 230 boepd to Mystique's production.
About Mystique
Based in Calgary, Mystique is involved in the exploration and exploitation of petroleum reserves in western Canada.
Disclaimers
Use of the term barrels of oil equivalent "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Except for statements of historical fact, all statements in this press release, without limitation, regarding new projects and future plans and objectives are forward-looking statements which involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
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