Tethys, the exploration and production Company focussed on Central Asia, is delighted to announce the result of an updated Independent Reserves Report, which has been prepared by Gustavson Associates with an effective date of December 31, 2014. The report meets the expectations of the Canadian Oil and Gas Evaluation Handbook in accordance with the requirements of National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.
- Production of 0.84 million barrels of oil (MMbbl) and 4.07 billion standard cubic feet of total gas (BCF) in 2014
- Increase in remaining gross reserves(1) in all three categories at December 31st 2014 over December 31st 2013
- Proven reserves (1P) of 16.62 million barrels of oil equivalent (BOE), up 18% from 2013, represents the highest volume in the history of the company in this reserves category
- Reserves Replacement Ratio (RRR) of 163% for the 1P category
- Proven and probable reserves (2P) of 27.08 million BOE, up 7% from 2013
- Reserve increases driven by the successful 2014 gas well development drilling program, and production performance above 2013 expectations
The 16.62 million BOE of proven reserves is a new peak in this category in the company's history, while the 2P and 3P amounts are the second highest volumes recorded. Proved reserves now comprise 40% of total reserves, even after a cumulative production of 9.54 million BOE from the start of gas production in December 2007 to 31st December 2014.
The RRR of 163% for the 1P category indicates strong organic growth. The breakdown shows an increase of 0.66 MMbbls and 10.92 BCF in the oil and gas respectively over and above the 2014 production of 0.84 MMbbls of oil and 4.07 BCF total gas production.
The increases have been realised through a combination of the successful 2014 gas well development drilling program, and improved production performance in existing gas and oil fields.
The calculated reduction in NPV between the 2013 and 2014 reports is primarily attributable to the downward revision of assumption of product prices, and to the assumption that future oil contracts will have a lower percentage available for export than assumed in previous reports. The small volume of associated gas is assumed to be sold at domestic prices only, due to recent Kazakhstan legislation; however, dry gas is still planned to be 100% exported in the future. The reserves in this press release do not reflect the pending sale of 50% of the Kazakhstan assets, which remains subject to Kazakh State waiver. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
David Roberts, chairman of the Reserves Committee, commented: "The Reserves Committee is very satisfied with the results contained in the annual independent review by Gustavson Associates, delivered earlier than in previous years. The growth in booked reserves is a reflection of excellent work in prospect maturation by the Tethys exploration team led by its Vice President Rosemary Johnson-Sabine OBE, and our Kazakhstan field operations staff under the stewardship of the Chief Operating Officer, Graham Wall.
Tethys' plans for 2015 include the maturation of exploration prospects, monetizing gas prospects through development drilling, and increased focus on field equipment reliability. We look forward to building on the figures in the Gustavson report during 2015, and with the reserves update concluded, we intend to issue a new corporate presentation in the coming days."