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2010 Reserve Reports

The reserve estimates shown in these reports were developed by Ralph E. Davis Associates, Inc. (“RED”), an independent petroleum engineering firm, and are based on the joint reserve and resource definitions of the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers. This year, the Company also completed an additional reserve report reflecting the requirements of the Canadian Form 51-101. The volumetric data presented in the Form 51-101 report is consistent with the report provided for UK reporting purposes. Proved and probable reserve estimates are based on a number of underlying assumptions including oil prices, future costs, oil in place and reservoir performance, which are inherently uncertain. Management uses established industry techniques to generate its estimates and regularly references its estimates against those of joint venture partners or external consultants. However, the amount of reserves that will ultimately be recovered from any field cannot be known with certainty until the end of the field’s life. All reserves are in the Latin America exploration and development area. As the Company did not hold any natural gas sales contracts as of 31 December 2010, the Company chose not to reflect the natural gas volumes included within these reports in its reportable reserves.

 

 

2010 Reserve Report (UK Basis)
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2010 Reserve Report (Canadian Basis)
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Key features of the Canadian Form 51-101 include:

  • statement of reserves data and other oil and gas information;
  • report of independent qualified reserves evaluator or auditor; and
  • qualified reserves evaluator or auditor" application of Canadian Oil and Gas Evaluation ("COGE") Handbook reserves evaluation standards and definitions

RED prepared the Form 51-101 in accordance with these features and other required rules and determined that the reserve volumetric data presented in the previously described UK reserves report were in agreement except for economic limit revisions related to oil price guideline differences (as mandated by Canadian 51-101 rules). The net reserves on the Form 51-101 report are largely the same as the UK report, however, the net present value calculations were slightly lower due to the required lower oil price assumptions (as mandated by Canadian annual requirement). The 51-101 report includes only estimates of proved and probable quantities of oil and gas reserves. Possible reserves are not quantified nor considered within a 51-101 report based on Canadian industry standards. Therefore, 3P information is not comparable.