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Malka Oil (STO:MALK) Malka Oil's extractable reserves on the company's three existing oil fields amounted to 91 million barrels as of April 30, 2008 according to an independent Western reserve study. The estimation is based upon Malka Oil's existing boreholes and supports the company's own estimation 140 - 190 million barrels of extractable oil and condensate on the three oil fields. A new study will be initiated that amongst others will include new production data and a new seismic report.
The American petroleum consulting company De Golyer and McNaugton has conducted the study according to the internationally acknowledged Petroleum Resources Management System which has been established by among others the Society of Petroleum Engineers (SPE).
The estimation of the proven and probable oil reserves (Proved P1 and Probable P2) amounts to 7.7 million respectively 35.9 million barrels and the possible reserves (Possible P3) to 47.0 million barrels, which in total gives 90.6 million barrels 3P. The estimation is in line with the earlier Russian reserve estimation of 97 million barrels which also includes the gas condensate.
The reserve study is not including the gas and condensate reserves and does not take the test result from the boreholes 210 and 580 into consideration. These boreholes will be included in an updated study which is planned to be completed before end of this year. Also, the undrilled structures which have been identified are not part of the study, only the three existing oil fields are included. The study supports Malka Oil's own internal estimation of 140 - 190 million barrels.
"Our development programme is today not optimized according to Western SPE-norms. We therefore see this report as a starting-point for the work to even more efficiently capture the potential of the license block and to focus our drilling programme on increasing the SPE-classified reserves", says Fredrik Svinhufvud, Managing Director Malka Oil.
To increase the proportion of proven and probable reserves, Malka Oil will engage an independent expert to analyze the company's development plans, the operation of the field and also to assist with the designing of new development plans. In this way the operation will be optimized with regards to SPE-norms going forward.
Malka Oils has also assigned De Golyer and McNaugton to conduct a more detailed reserve estimation in the form of a complete Competent Person's Report (CPR) which is expected to be ready before end of this year. This report will include the conclusions from the revised development plans, new test results from the boreholes 210 and 580, new production data from existing wells and also the new seismic report from the northern part of the license block.
For further information, please contact: Fredrik Svinhufvud, Managing Director Malka Oil, tel +46 8 5000 7811, mobile +46 708 708 708 Richard Tejme, CFO, tel +46 8 5000 7812 mobile +46 707 31 52 17
For further information on Malka Oil AB, see the website www.malkaoil.se
Malka Oil AB (publ) is an independent oil and gas production company operating in the Tomsk region in western Siberia. Their current position consists of oil and gas assets for license block number 87 in the said region. The block has a surface of 1,800 square kilometres. There are currently three oil fields at the license block, namely Zapadno-Luginetskoye ("ZL"), Lower Luginetskoye ("LL") and the Schinginskoye oil field, and a large quantity of other not yet drilled oil structures. The ZL and LL oil fields are in production and these two oil fields field have also went through reserve classification by the Russian State Committee of Reserves (GKZ). A considerable drilling programme was carried out in 2007. The GKZ registered extractable oil and condensate reserves in the categories C1 and C2 amounted to 97 million barrels at the end of 2007. The company's own estimate of its extractable oil and condensate reserves in the three existing oil fields on license block number 87 is currently 140-190 million barrels. Malka Oil's license block is surrounded by a large number of producing oil and gas fields.
Reasonable caution notice: The statement and assumptions made in the company's information regarding Malka Oil AB's ("Malka") current plans, prognoses, strategies, concepts and other statements that are not historical facts are estimations or "forward looking statements" concerning Malka's future activities. Such future estimations comprise but are not limited to statements that include words such as "may occur", "concerning", "plans", "expects", "estimates", "believes", "evaluates", "prognosticates" or similar expressions. Such expressions reflect the management of Malka's expectations and assumptions made on the basis of information available at that time. These statements and assumptions are subject to a large number of risks and uncertainties. These, in their turn, comprise but are not limited to i) changes in the financial, legal and political environment of the countries in which Malka conducts business, ii) changes in the available geological information concerning the company's projects in operation, iii) Malka's capacity to continuously guarantee sufficient financing to perform their activities as a "going concern", iv) the success of all participants in the group, or of the various interested companies, joint ventures or secondary alliances, v) changes in currency exchange rates, in particular those relating to the RUR/USD rate. Due to the background of the many risks and uncertainties that exist for any oil-prospecting venture and oil production company in its initial stage, Malka's actual future development may significantly deviate from that indicated in the company's informative statements. Malka assumes no implicit liability to immediately update any such future evaluations.
