Publication of Competent Person's Report

RNS Number : 1900D

Independent Resources PLC

26 March 2014

 

26 March 2014

Independent Resources plc (AIM: IRG)

Publication of Competent Person's Report on Ksar Hadada

Estimated 108MM BOE of prospective resources

Independent Resources ("Independent" or "the Company" today announces the release of a third-party evaluation ("Competent Persons Report" or "CPR") of the Ksar Hadada permit onshore Tunisia.

The CPR was prepared by Blackwatch Petroleum Services Limited ("Blackwatch").

Blackwatch's evaluation covers the Sidi Toui and Gazelle prospects within the Ksar Hadada permit area.  The report attributed a 38% chance of success to the Sidi Toui prospect and a 19% chance of success to the Gazelle prospect.  These risk factors have been used to derive the risked resources and risked economic values outlined below. 

As announced in February 2014, Tunisia's national oil company, Entreprise Tunisienne d'Activités Pétrolières (ETAP) with the support of the Company has made an application on 19 February 2014 for Independent Resources to be the Operator of the Ksar Hadada licence with an interest of 86.345% of the Production Sharing Contract for the extension period of two years.  Approval by the Consultative Commission on Hydrocarbons of Tunisia is expected next month.

Key findings

(a)          Resources in place and recoverable resources

For the combined Sidi Toui and Gazelle prospects, on a P_mean and gross basis (100% interest) the CPR estimates:

Total oil and gas in place	639.3 million barrels of oil equivalent ("BOE")
Total recoverable resources (unrisked)	107.9 million BOE
Total recoverable resources (risked)	33.9 million BOE

(b)          Economic valuation of licence

In compiling its report, Blackwatch has prepared an economic valuation of the Sidi Toui and Gazelle prospects, assuming an oil price of US$95 per barrel and applying a 10 per cent. discount rate to all future cashflows. 

This exercise attributes the following combined post-tax economic values on a gross basis (100% interest) to the Sidi Toui and Gazelle prospects:

NPV10 (Unrisked)	US$ 837 million
NPV10 (Risked)	US$ 263 million

Further detail of the estimates contained in the CPR is set out in Appendix I to this announcement.

Information on Ksar Hadada

The Ksar Hadada exploration permit covers an onshore area of 2,252 square kilometres in south-east Tunisia. The primary targets on the Ksar Hadada block are the Ordovician Bir Ben Tartar quartzites and the Silurian Acacus Sandstone, sourced by the basal member of the Silurian Tanezzuft Shale, which is the main source rock for North Africa.

Independent has held an interest in the Ksar Hadada licence since 2005 and currently holds an interest of 18.97% in the licence.  In February 2014, ETAP with the support of Independent and the other minority partners submitted an application for to extend the period of the Ksar Hadada permit by two years until 19 April 2016 and for Independent to be the operator of the Ksar Hadada licence with an interest of 86.345%.

Future work programme

Once the award of operatorship is granted and the licence extension is granted, Independent and its partners in the licence expect to commence a work programme including 200km² of 3D seismic, re-entry of one existing well and drilling one new well.

Shooting of the seismic is expected to begin in the third quarter of this year with drilling beginning in the first quarter of 2015.

In due course, IRG expects to bring in partners to fund a significant portion of the work programme.

Greg Coleman, CEO, stated:

"The Board expects that Tunisia will be one of the core areas for Independent as we implement our Mediterranean Basin exploration and production strategy over the coming months.  The findings of the evaluation by Blackwatch clearly indicate the potential value of the Ksar Hadada opportunity. 

We look forward to formal announcement of the award of the two year extension and the award of operatorship, which we currently expect next month and to progressing with the work programme.

For further information, please visit www.ir-plc.com or contact:
Greg Coleman	Independent Resources plc	020 3367 1134
Phil Davies	Charles Stanley Securities (Nominated Adviser)	020 7149 6942
Simon Hudson	Tavistock Communications	020 7920 3150

About Blackwatch

Blackwatch Petroleum Services Ltd (Blackwatch) is an independent provider of geological, petroleum engineering, well testing and drilling engineering services to the international petroleum industry. The company specialises in the modelling, estimation, assessment and evaluation of oil and gas assets. Except for the provision of professional services on a fee basis, Blackwatch does not have any interest in or commercial arrangement with any persons employed by or acting for Independent.

The CPR was prepared under the supervision of Samuel L Metcalfe, BA Geology, BSc Civil Engineering, and MSc Petroleum Engineering, and Terry Pimble BSc Geology, MSc Geophysics. Mr Metcalfe is Managing Director of Blackwatch and has over thirty years of experience in the international oil industry in the estimation, assessment, evaluation, exploration, development and management of hydrocarbon reserves and resources. Mr Pimble is a Geoscience Director and Chief Geophysicist with over thirty years of experience in the international oil industry in the estimation, assessment and evaluation of hydrocarbon reserves.

Blackwatch classified the prospective resources according to the SPE/WPC/AAPG/SPEE Petroleum Resources Management System ("PRMS"),

Roberto Bencini, Technical Director of Independent Resources, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009.  Mr. Bencini is a Chartered Petroleum Geologist. He is a member of the Society of Petroleum Engineers, the Geological Society of London and the American Association of Petroleum Geologists.

* The evaluation of the potential recoverable hydrocarbons mentioned in this announcement has been assessed in accordance with Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) 2007, and the Guidelines for Application of the Petroleum Resources Management System, November 2011.   Both documents were reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).

Appendix I

Supplementary detail from the CPR

(a)          Resources in place and recoverable resources

Sidi Toui

For the Sidi Toui prospect, on a P_mean and gross basis the CPR estimates:

Total oil in place	425.5 million barrels
Total gas in place	170.0 BCF
Total oil and gas in place	453.8 million BOE
Total recoverable resources (unrisked)	70.8 million BOE
Total recoverable resources (risked)	26.9 million BOE

Gazelle

For the higher risk, Gazelle prospect, on a P_mean and gross basis the CPR estimates:

Total oil in place	173.9 million barrels
Total gas in place	69.5 BCF
Total oil and gas in place	185.5 million BOE
Total recoverable resources (unrisked)	37.1 million BOE
Total recoverable resources (risked)	7.1 million BOE

(b)          Economic valuation of licence

In compiling its report, Blackwatch has prepared an economic post-tax valuation of the Sidi Toui and Gazelle prospects on a gross basis (100% interest) assuming an oil price of US$95 per barrel and applying a 10 per cent. discount rate to all future cashflows:

	NPV10 (Unrisked)	NPV10 (Risked)
Sidi Toui	US$ 547 million	US$ 208 million
Gazelle	US$ 291 million	US$ 55 million
Combined	US$ 837 million	US$ 263 million

Appendix II

Glossary of terms

The following table provides an explanation of certain technical terms and abbreviations used in this announcement.   The terms and their assigned meanings may not correspond to standard industry meanings or usage of these terms.

"BOE"	barrels of oil equivalent. One barrel of oil is approximately the energy equivalent of 6,000 cf of natural gas
"Bcf"	billion (109) standard cubic feet; 1 Bcf is approximately equal to 166,666 Boe using a factor of 6.0 Bcf per MMBbls
"gross basis"	assuming a 100% interest in the licence
"oil equivalent"	international standard for comparing the thermal energy of different fuels
Pmean	a value that has a "mean" chance of being equaled or exceeded, where mean is the arithmetic average of the set of possible outcomes, the expected value
"prospective resources"	those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects
"recoverable resources"	those quantities of hydrocarbons which are estimated to be producible from accumulations, either discovered or undiscovered.
"resources"	deposits of naturally occurring hydrocarbons which, if recoverable, include those volumes of hydrocarbons either yet to be found (prospective) or if found the development of which depends upon a number of factors (technical, legal and/or commercial) being resolved (contingent)
"resources in place"	all those estimated quantities of petroleum contained in the subsurface, as well as those quantities already produced.
"seismic"	a method by which an image of the earth's subsurface is created through the generation of shockwaves and analysis of their reflection from rock strata. Such surveys can be done in two or three dimensional form

 

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