CALGARY, March 12 /CNW/ - Tango Energy Inc. ("Tango") provides the following reserves data and operations update.
2008 Reserves Report --------------------
The following tables provide information on Tango's petroleum oil and gas reserves and the present value of the estimated future net cash flow associated with such reserves as at December 31, 2008. The information set forth below is derived from the Paddock Lindstrom and Associates Ltd. report, which has been prepared in accordance with the standards contained in the COGE Handbook and the reserves definitions contained in NI 51-101. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Corporation's properties. There is no assurance that such price and cost assumptions will be attained and variances could be material. "Gross" reserve quantities include the Company's share of reserves before royalty plus royalty income volumes. "Net" reserve quantities include the Company's share of reserves after royalty plus royalty income volumes.
-------------------------------------------------------------------------
SUMMARY OF OIL AND GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
as of December 31, 2008
-------------------------------------------------------------------------
RESERVES
-------------------------------------------------------------------------
LIGHT AND NATURAL NATURAL GAS
MEDIUM OIL GAS LIQUIDS
-------------------------------------------------------------------------
Gross Net Gross Net Gross Net
RESERVES CATEGORY (mbbl) (mbbl) (mmcf) (mmcf) (mbbl) (mbbl)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
PROVED
-------------------------------------------------------------------------
Developed Producing - - 2,521 1,540 15.4 9.6
-------------------------------------------------------------------------
Developed Non-Producing - - 1,974 1,454 27.3 17.0
-------------------------------------------------------------------------
Undeveloped - - - - - -
-------------------------------------------------------------------------
TOTAL PROVED - - 4,495 2,994 42.6 26.6
------- ------- ------- ------- ------- -------
-------------------------------------------------------------------------
PROBABLE - - 6,147 4,545 81.6 54.5
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE - - 10,642 7,539 124.2 81.1
------- ------- ------- ------- ------- -------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NET PRESENT VALUES OF FUTURE NET REVENUE
-------------------------------------------------------------------------
BEFORE INCOME TAXES DISCOUNTED AT
-------------------------------------------------------------------------
RESERVES 0% 5% 10% 15% 20%
CATEGORY (m$) (m$) (m$) (m$) (m$)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
PROVED
-------------------------------------------------------------------------
Developed Producing 9,058 7,742 6,821 6,141 5,619
-------------------------------------------------------------------------
Developed Non-Producing 9,651 7,249 5,751 4,714 3,949
-------------------------------------------------------------------------
Undeveloped - - - - -
-------------------------------------------------------------------------
TOTAL PROVED 18,709 14,991 12,572 10,855 9,568
------- ------- ------- ------- -------
-------------------------------------------------------------------------
PROBABLE 31,500 21,583 15,908 12,295 9,824
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 50,209 36,574 28,480 23,150 19,392
------- ------- ------- ------- -------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NET PRESENT VALUES OF FUTURE NET REVENUE
-------------------------------------------------------------------------
AFTER INCOME TAXES DISCOUNTED AT
-------------------------------------------------------------------------
RESERVES 0% 5% 10% 15% 20%
CATEGORY (m$) (m$) (m$) (m$) (m$)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
PROVED
-------------------------------------------------------------------------
Developed Producing 9,058 7,742 6,821 6,141 5,619
-------------------------------------------------------------------------
Developed Non- Producing 7,630 5,801 4,646 3,836 3,233
-------------------------------------------------------------------------
Undeveloped - - - -
-------------------------------------------------------------------------
TOTAL PROVED 16,687 13,543 11,467 9,977 8,851
------- ------- ------- ------- -------
-------------------------------------------------------------------------
PROBABLE 23,477 15,949 11,641 8,903 7,034
-------------------------------------------------------------------------
TOTAL PROVED PLUS PROBABLE 40,164 29,492 23,108 18,880 15,885
------- ------- ------- ------- -------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS
as of December 31, 2008
FORECAST PRICES AND COSTS
-------------------------------------------------------------------------
OIL
-------------------------------------------------------------------------
Cromer
Edmonton Hardisty Medium
WTI Par Price Heavy 29.0
Cushing 40 degrees 12 degrees degrees
Oklahoma API API API
Year ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl)
-------------------------------------------------------------------------
Forecast
-------------------------------------------------------------------------
2009 60.00 70.18 42.18 65.27
-------------------------------------------------------------------------
2010 67.50 77.21 48.21 71.81
-------------------------------------------------------------------------
2011 75.00 83.93 55.53 78.05
-------------------------------------------------------------------------
2012 82.50 90.34 61.53 84.02
-------------------------------------------------------------------------
2013 90.00 98.65 69.42 91.74
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NATURAL Edmonton
GAS(1) Cond. & INFLATION EXCHANGE
AECO Gas Natural RATES RATE
Price Gasolines
Year ($Cdn/mmBTU) ($Cdn/bbl) %/Year ($US/Cdn)
-------------------------------------------------------------------------
Forecast
-------------------------------------------------------------------------
2009 7.24 70.88 2.0 0.84
-------------------------------------------------------------------------
2010 7.90 77.99 2.0 0.86
-------------------------------------------------------------------------
2011 8.26 84.77 2.0 0.88
-------------------------------------------------------------------------
2012 8.60 91.24 2.0 0.90
-------------------------------------------------------------------------
2013 9.13 99.63 2.0 0.90
-------------------------------------------------------------------------
Forecast product prices and operating costs were escalated at a rate of 2.0% per year beyond 2013. The exchange rate used for the US/Canadian dollar was 0.90. The forecast prices presented above utilize Paddock Lindstrom's price forecast as at December 31, 2008.
FD&A costs (including acquisition and divestment reserve volumes and capital) on a proven basis were $14.18 per boe, and on a proven and probable basis were $11.61 per boe. The capital assumptions in these calculations include all capital, including capital associated with acquisitions and divestments as well as changes in future capital contained in the reserves report relating to proved or proved and probable reserves. Reserve volumes and are net of all additions and technical revisions.
F&D costs (excluding acquisition and divestment reserve volumes and capital) on a proven basis were $38.94 per boe, and on a proven and probable basis were $20.52 per boe. The capital assumptions in these calculations includes all capital as well as changes in future capital contained in the reserves report relating to proved or proved and probable reserves, but specifically excludes reserve volumes and capital associated with acquisitions and divestments. Reserve volumes and are net of all additions and technical revisions, excluding reserves due to acquisitions or divestments.
Excluding acquisitions and dispositions, proven plus probable reserve additions (including revisions and after production) were 179 mboe, replacing approximately 115% of Tango's production volumes during 2008.
Due to the divestment of the Cecilia property, Tango's proved plus probable petroleum and natural gas reserves (net before royalty) decreased 25% after production to 1,898 mboes as at December 31, 2008. The Cecilia sale comprised 458 mboe proven and 284 mboe probable reserves for total consideration of $9.5 million (after adjustments), or $20.80 per barrel of oil equivalent of proven reserves and $12.84 per barrel equivalent of proven plus probable reserves.
Tango estimates that its net asset value (as defined by the 10% before tax net present value of reserves plus positive working capital at December 31, 2008 plus independent land and seismic value) is $0.25 per share based on proven reserves, and $0.49 per share based on proven plus probable reserves.
Additional reserve information will be included in Tango's NI 51-101 report, which will be filed on SEDAR.
Operations Update -----------------
Tango announces that current sales volumes are approximately 450 boepd. Additional sales volumes are expected from a new well at Beaton and the tie in of an additional well at Worsley prior to the end of the second quarter of 2009. At Quaich, the discovery well at 3-3 has been on stream since December 21, 2008 at restricted rates of 330 boepd gross sales in which Tango has a 60% working interest. An additional well has been licensed at Quaich and the operator is expected to drill this well during the 3rd or 4th quarter of 2009.
Outlook -------
In a business environment of restricted capital availability and reduced cash flows, Tango is currently focused on corporate and property acquisition opportunities. Tango will continue to maintain existing properties and production through prudent investments where the deployment of capital results in immediate economic returns. In addition, Tango is pursuing industry partners to drill existing deeper prospects and rationalize existing assets through swaps.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
This release contains forward-looking information. By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties that may cause actual future results to differ materially from those contemplated. These risks include such things as volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, ultimate recoverability of reserves, timing and costs of drilling activities and pipeline construction, new regulations and legislation and availability of capital. Tango does not undertake to update any of such forward-looking statements. Please refer to Tango's Annual Report for more detail as to the nature of these risks and uncertainties. Although Tango believes that the expectations represented by these forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
BOE's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a barrel of oil equivalent (boe) conversion ratio of 6 mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Abbreviations used are defined as flows: m$ (thousands of dollars); mcf (thousand standard cubic feet); mmcf (million standard cubic feet); mboe (thousands of barrels of oil equivalent); mmBTU (million British Thermal Units).
The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in the estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.
%SEDAR: 00017586E