Material Increase in Reserves and Production
- New independent reserves report from Netherland Sewell & Associates for Madden Gas Field
- Total Madden Gas Field Proved Gas Reserves increase to 79.5 BCF (13.3 MMBOE) - up 13%
- 2P Proved + Probable Oil & Gas Reserves increase to 20.5 MMBOE - up 10%
- Madden Gas Field Production ahead of forecast at 4,000 BOE/day 24 MMCF/day - up 20%
Following the completion of the Madden Gas Field acquisition, the Company engaged NSAI to conduct an independent review of the Reserves for the field based on the latest field performance, proposed operations plans and production information provided by the operator, ConocoPhillips. The Company's Total Proven, Probable and Possible Reserves for the Grieve CO2 EOR Project and the Madden Gas Field are set out in the table below.
--------------------------------------------------------------------- Summary of Elk Petroleum Oil & Gas Reserves As of 1 January 2017 Reserve Category Elk Net Elk Net (BCFE) (MMBOE) Proved (1P) 79.5 13.3 Proved + Probable (2P) 123.1 20.5 Proved+Probable+Possible 145.0 24.2 (3P) Reserves independently audited by Netherland Sewell & Associates, Inc and VSO Petroleum Consultants as of 1 January 2017 ---------------------------------------------------------------------
The result of the NSAI independent review based on the latest operator data has resulted in a 13% increase in the 1P Total Proven Reserves for the Madden Gas Field and an overall 10% increase to 20.5 MMBOE in the Company's Total 2P Proven + Probable Reserves covering both the Madden Gas Field and the Grieve CO2 EOR Project, up from 18.3 MMBOE.
These significant increases in the 1P Total Proven and 2P Total Proven + Probable Reserves further highlight the high quality and material impact on the Company of the Madden Gas Field acquisition. A more complete break-down of the Company's Reserves is included in a detailed table included as an Appendix to this ASX release.
As previously announced there are significant behind-pipe discovered oil and gas Contingent Resources in the Madden Gas Field that have been identified by the operator. Over the coming months, the Company intends to conduct a further detailed review with NSAI to fully identify and account for these Contingent Resources. When this additional review is complete a further update will be provided.
Madden Gas Production Running Ahead of Forecast
The Company is pleased to report that gas production from the Madden Gas Field for the first quarter CY 2017 has been running at approximately 24 MMSCF/day (4,000 BOE/day) which is well ahead of previous forecasts. The operator has also advised that while conducting additional production performance tests on the Lost Cabin Gas Plant that production net to Elk for the month of April 2017 is forecast to be approximately 28.7 MMSCF/day (~4,780 BOE/day) and that gas marketing arrangements should be made for these higher forecast volumes. Under the terms of the acquisition of the Madden Gas Field which completed on 17 March 2017, all production associated with the working interest acquired are for Elk's account effective 1 January 2017.
Upon announcing the Madden Gas Field acquisition on 4 January 2017, the Company advised that the Madden Gas Field acquisition would deliver long-term, low decline rate profitable production of approximately 20 MMCFD/day (3,400 BOEPD). As a result of sustained field production performance and high operator production efficiency, the Madden Gas Field is achieving significantly better production rates approximately 20% ahead of initial forecasts provided upon announcing the acquisition.
Managing Director Brad Lingo commented "The outcome of the NSAI Report and the production performance from the Madden Gas Field really highlight how attractive and how material the Madden Gas Field acquisition is to the Company. Our initial engagement with the operator ConocoPhillips has been excellent and they have clearly demonstrated that they have a team in place that knows this asset well and know how to get the best out of the Madden Gas Field and the Lost Cabin Gas Plant and are looking at both to be long-term profitable and material production assets."
Mr. Lingo continued, "We see lots of additional upside in the Madden Gas Field from both the current gas production as well as significant behind-pipe resources that have been identified by ConocoPhillips. We are also very focused on making the most out of the significant CO2 resource that the Lost Cabin Gas Plant provides which has already been commercialized and connected into the Wyoming CO2 Pipeline Network. This asset is an excellent fit for Elk and we will certainly be making the most of it."
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About Elk Petroleum Limited
Elk Petroleum Limited (ASX:ELK) (OTCMKTS:EKPTF) is an oil and gas company specialising in Enhanced Oil Recovery (EOR), with assets located in one of the richest onshore oil regions of the USA, the Rocky Mountains. Elk's strategy is focused on applying proven EOR technologies to mature oil fields, which significantly de-risks the Company’s strategy of finding and exploiting oil field reserves.
Elk Petroleum Limited