Pan Orient Announces 2020 Year-end Thailand Reserves Update

Source: www.gulfoilandgas.com 2/1/2021, Location: Asia

Pan Orient Energy Corp., on behalf of Pan Orient Energy (Siam) Ltd. ("POS"), announced the results of its December 31, 2020 independent reserves evaluation for Thailand on-shore Concession L53/48 where POS is the operator and has a 100% working interest. Pan Orient has a 50.01% equity interest in POS, which is classified as a Joint Venture under International Financial Reporting Standards and accounted for using the equity method. Pan Orient's 50.01% equity interest in the assets, liabilities, working capital, operations and capital expenditures of POS are recorded in Investment in the Thailand Joint Venture and Pan Orient does not have any direct interest in, or control over, the crude oil reserves or operations of on-shore Concession L53/48.

The evaluation for the Thailand assets as at December 31, 2020 was conducted by Sproule International Limited of Calgary ("Sproule") and was prepared in accordance with Canadian Securities Administrators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

Commenting on the year-end 2020 reserve report of Pan Orient Energy (Siam) Ltd., President and CEO Jeff Chisholm stated: "This year-end 2020 reserves report is an excellent result with proved reserves up 130% and proved plus probable reserves up 30%, mainly due to the production performance of the L53-DD field. While the oil volumes are strong, the proved and probable net present value after tax (discounted at 10%) was down 11% year-on-year as a result of the substantially lower (-17%) average oil price forecast at year-end 2020 versus year-end 2019, a reflection of the current uncertainty in the global oil markets. Despite the uncertainty with regard to oil markets in 2021, we look forward to a strong year of oil production performance from the L53 Concession".

Summary of Thailand Reserves at December 31, 2020 for Concession L53/48
- Thailand crude oil reserves and values at December 31, 2020 of POS (representing the 100% working interest of POS in Concession L53/48):
o Proved oil reserves ("1P") of 2,836,000 barrels at December 31, 2020, a 130% increase from the 1,235,000 barrels at December 31, 2019.
o Proved plus probable oil reserves ("2P") increased 30% to 4,753,000 barrels at December 31, 2020 compared with proved plus probable oil reserves of 3,668,000 barrels at December 31, 2019. The increase in 2020 reflects the following changes during 2020:
- Oil sales increased 15% in 2020 to 887,863 barrels (2,426 BOPD), with 734,006 barrels (2,005 BOPD) from the L53DD field, 64,688 barrels (177 BOPD) from the L53G field, 36,454 barrels (100 BOPD) from the L53A field, 22,301 barrels (61 BOPD) from the L53D field, 12,832 barrels (35 BOPD) from the L53B field, 11,670 barrels (32 BOPD) from the L53AA South field and 6,001 barrels (16 BOPD) from the new L53AA field.
- The L53DD field added 734,006 barrels of oil sales in 2020 compared with 615,460 barrels in 2019. The L53DD field at December 31, 2019 has been assigned proved reserves of 2,132,000 barrels and proved plus probable reserves of 3,468,000 barrels (including a positive technical revision of proved plus probable reserves in 2020 of 1,732,000 barrels based on well performance).
- Discovery of the L53AA field with the L53-AA2 exploration well in the first quarter of 2020 added 6,001 barrels of oil sales in 2020 during the 90 day production test and has been assigned proved reserves of 19,000 barrels and proved plus probable reserves of 43,000 barrels at December 31, 2020.
- Proved plus probable reserves increases from positive technical revisions and infill drilling (net of negative economic factors associated with lower forecast prices) reported for the six existing L53/48 fields were 1,924,000 barrels (52% of December 31, 2019 proved plus probable reserves).
- Net present value (after tax) of Thailand proved plus probable oil reserves at December 31, 2020, using forecast prices and costs discounted at 10% per year, of Cdn$77.8 million. The 11% decrease in the net present value (after tax) of Thailand proved plus probable oil reserves from $87.4 million at December 31, 2019 is the result of the 30% increase in proved plus probable reserves (primarily at the L53-DD field) more than offset by a 17% decrease in average oil sales prices.
o After the L53DD oil discovery in 2018, the Company requested the inclusion of possible oil reserves at December 31, 2018, December 31, 2019 and December 31, 2020 in order to better define the potential upside of the field. 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.
Possible oil reserves decreased 47% to 2,091,000 barrels at December 31, 2020 from 3,909,000 barrels at December 31, 2019 as possible reserves were moved into proved and probable reserves. Total proved plus probable plus possible oil reserves ("3P") are 6,844,000 barrels at December 31, 2020 with a net present value (after tax) using forecast prices and costs discounted at 10% per year, of Cdn$103.4 million.
o Thailand Concession L53/48 reserves are from conventional sandstone reservoirs.
- Net to Pan Orient's 50.01% equity interest in POS:
o Pan Orient does not have any direct interest in, or control over, the crude oil reserves or operations of on-shore Concession L53/48. The values at December 31, 2020 identified as "Net to Pan Orient's 50.01% Equity Interest in Pan Orient Energy (Siam) Ltd." represent 50.01% of POS reserves and values.
o Net to Pan Orient's 50.01% equity interest in POS, proved plus probable crude oil reserves of 2,377,000 barrels at December 31, 2020. Net to Pan Orient's 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable crude oil reserves at December 31, 2020, using forecast prices and costs discounted at 10% per year, of Cdn$38.9 million, or $0.75 per Pan Orient share based on the 51.7 million Pan Orient shares outstanding at December 31, 2020.
o Net to Pan Orient's 50.01% equity interest in POS, proved plus probable plus possible crude oil reserves of 3,423,000 barrels at December 31, 2020. Net to Pan Orient's 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable plus possible crude oil reserves at December 31, 2020, using forecast prices and costs discounted at 10% per year, of Cdn$51.7 million, or $1.00 per Pan Orient share based on the 51.7 million Pan Orient shares outstanding at December 31, 2020.


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