CALGARY, Aug. 13 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL) is pleased to announce a mid-year 2007 third party reserves update of its Colombian assets wherein total proved plus probable oil reserves have increased by 3.6 mmbbls or 390%. This mid-year update follows Solana's participation, during the first half of 2007, in the Costayaco and Juanambu new field discoveries, Putumayo Basin, southern Colombia. This evaluation has an effective date of June 30, 2007 and was completed by DeGolyer and MacNaughton, Solana's independent reserves engineers. The reserves stated herein are based on forecast prices and costs and reflect Solana's interest net of all royalties. Degolyer and MacNaughton's reserve report evaluates Solana's Guepaje, Yalea, Guayuyaco, Juanambu and Costayaco properties but does not include any resources associated with the exploration properties in Solana's 11 Colombian blocks.
Highlights of the DeGolyer & MacNaughton report, with comparisons to the December 31, 2006 reserves report, are:
- Total proved oil reserves increased by 180% to 2.0 million barrels.
- Total proved plus probable oil reserves increased by 390% to 4.5
million barrels.
- Total proved, probable and possible oil reserves increased by 825% to
8.6 million barrels.
- Total proved plus probable net present value ("NPV") at 10% discount
(before taxes) of US$ 127 million, an increase of 500%.
- Total proved, probable and possible NPV10% (before taxes) of US$ 219
million, an increase of over 900%.
Company Net Reserves - June 30, 2007
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Gas
Oil (mbbls) (mcf)
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Reserve Category Yalea Guayuyaco Juanambu Costayaco TOTAL Guepaje
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Proved
- Producing 58 145 - - 203 1,938
- Non Producing - 319 231 811 1,361 -
- Undeveloped - 107 - 348 455 -
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Total Proved 58 571 231 1,159 2,019 1,938
Probable 8 156 331 2,007 2,502 253
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Total Proved
+ Probable 66 727 562 3,166 4,521 2,191
Possible - - 512 3,544 4,056 -
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Total Proved
+ Probable
+ Possible 66 727 1,074 6,710 8,577 2,191
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Company Net Present Value @ 10% (before tax) - June 30, 2007
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mUS$
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Reserve Category Yalea Guayuyaco Juanambu Costayaco Guepaje TOTAL
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Proved
- Producing 2,157 5,511 - - 1,926 9,594
- Non Producing - 5,441 5,642 30,254 - 41,337
- Undeveloped - 2,325 - 9,631 - 11,956
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Total Proved 2,157 13,277 5,642 39,885 1,926 62,887
Probable 237 2,291 9,081 52,587 205 64,401
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Total Proved
+ Probable 2,394 15,568 14,723 92,472 2,131 127,288
Possible - - 12,354 79,552 - 91,906
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Total Proved
+ Probable
+ Possible 2,394 15,568 27,077 172,024 2,131 219,194
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Company Working Interest (before royalties)
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Working Interest (%)
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Yalea Guayuyaco Juanambu Costayaco Guepaje
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60.9% 35% 35%(x) 50% 37.8%
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(x) Post assumed Ecopetrol back-in
Significant Assumptions and Uncertainties
The preceding information presents values that are estimated for proved, probable and possible reserves (as defined in the Canadian Oil and Gas Evaluation Handbook) using costs and prices in US$ obtained from sources considered to be reasonable by the Corporation and the reserves evaluator, DeGolyer and MacNaughton.
The process of estimating reserves is complex requiring significant judgments and decisions based on available geological, geophysical, engineering and seismic data. Although every reasonable effort is made to ensure that reserve estimates are accurate, reserve estimation is an inferential science. As a result, the subjective decisions, new geological or production information and a changing environment may impact these estimates and the impact could be material.
Mr. Glenn Van Doorne, Chief Operating Officer of Solana, a Petroleum Geologist, is the qualified person who has reviewed the technical information contained in this news release.
Forward Looking Statements
Certain information regarding the Company, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, mechanical problems, equipment limitations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated.
Solana Resources Limited
Solana (www.solanaresources.com) is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company's properties are located in Colombia, South America and are held through its wholly owned subsidiary, Solana Petroleum Exploration (Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.
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RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.