Welcome!

News Feed Item

Sintana Energy Announces Results of an Independent Evaluation Report of Conventional and Unconventional Resources for its VMM-37 Block in Colombia

SNN  |  TSX-V

TORONTO, Nov. 20, 2012 /CNW/ - Sintana Energy Inc. (TSX-V: SNN) ("Sintana" or the "Company") is pleased to announce the results of an independent, NI 51-101 compliant resource evaluation report (the "Report") prepared by Petrotech Engineering Ltd. ("Petrotech"). The Report titled "Evaluation Of The Interests of Sintana Energy Inc. in the VMM 37 Block in the Middle Magdalena Valley Basin Colombia" dated November 16, 2012 provides conventional and unconventional prospective resources on its 43,000 acre VMM 37 Block in Colombia.

For the conventional formation (Lisama) on the Block, in which the Company has a 100% private participation interest, Petrotech calculated a P50 best estimate effective July 31, 2012 of unrisked prospective recoverable resources of 51 million barrels of oil.

As to the unconventional zones of interest, Petrotech has assigned a P50 best estimate effective July 31, 2012 of unrisked prospective recoverable resources of 700 million barrels of oil.  As recently announced, and for the purpose of the evaluation, the Company has farmed-out a 70% participation interest in the prospective unconventional resources in the Tablazo, Salada and Galembo formations to ExxonMobil Exploration Colombia Limited who will pay 100% of the exploration costs of the first three wells to drill down to the Tablazo.  These wells will likely encounter the Lisama formation (conventional - Sintana 100%) and ExxonMobil will provide the electric logs of this section for evaluation by Sintana at no cost to the Company.  If hydrocarbons are encountered in the Lisama, the subsequent testing and development of this formation will be borne 100% by the Company.   In addition, ExxonMobil is to pay $45 million for Phase 2 (initial development phase) of the work program.  Once first production is achieved, Sintana will pay back $10 million from 50% of its proceeds.

The P50 best estimate before royalties for the Company's remaining 30% interest in the unconventional formations is a prospective recoverable resource of 210 million barrels of oil.

Unrisked Prospective Resources in the Lisama, Tablazo, Salada and Galembo Formations
  Conventional Heavy Oil
Resources
Unconventional Light &
Medium Oil Resources
Before Tax NPV @
  100% Gross Net 100% Gross Net 0% 5% 10% 15% 20%
Estimate MMbbl MMbbl MMbbl MMbbl MMbbl MMbbl MM$ MM$ MM$ MM$ MM$
Low Case:                      
Lisama 7.7 7.7 7 - - - 115.3 87.9 66.8 50.3 37.3
Tablazo - - - 33.7 16.9 15.5 -538.0 -401.9 -308.9 -243.7 -196.7
Salada - - - 66.9 20.1 18.4 587.0 356.2 226.1 149.3 102.0
Galembo - - - 66.9 20.1 18.4 550.4 281.1 151.2 85.2 49.9
Total Low 7.7 7.7 7 167.6 57 52.3 714.8 323.2 135.1 41.1 -7.5
                       
Best Case:                      
Lisama 50.5 50.5 45.9 - - - 1,861.3 1,490.8 1,211.1 996.4 828.9
Tablazo - - - 121.9 36.6 33 429.4 206.3 98.4 44.2 15.9
Salada - - - 289.2 86.7 77.8 3,707.1 2,076.6 1,239.0 780.6 514.8
Galembo - - - 289.2 86.7 80.6 4,014.9 1,869.0 934.8 497.7 279.4
Total Best 50.5 50.5 45.9 700.2 210.1 191.4 10,012.6 5,642.8 3,483.4 2,318.8 1,638.9
                       
High Case:                      
Lisama 167.7 167.7 149.5 - - - 7,175.2 5,499.9 4,304.0 3,430.9 2,779.3
Tablazo - - - 374.5 112.4 96.3 3,182.1 1,965.2 1,293.8 899.3 653.5
Salada - - - 687.8 206.3 178 9,302.2 5,006.8 2,890.6 1,772.7 1,143.7
Galembo - - - 687.8 206.3 178 9,765.2 4,327.7 2,075.5 1,065.5 579.2
Total High 167.7 167.7 149.5 1,750.20 525 452.3 29,424.6 16,799.7 10,564.0 7,168.3 5,155.6

Notes:

1) The Lisama Formation is conventional resources and the Tablazo, Salada and Galembo Formations are considered as unconventional resources.
2) Each formation is assumed to receive commerciality individually.
3) The estimated net present values disclosed do not represent fair market value.

This evaluation uses the definition of resources and follows the guidelines from the Canadian Oil and Gas Evaluation (COGE) Handbook. From geophysical and well data available at this time, three prospects have been identified in the VMM 37 Block in the Lisama, Galembo, Salada and Tablazo Formations.  The evaluation above provides the unrisked prospective resources (prospects) in the Lisama, Galembo, Salada and Tablazo Formations. The Galembo, Salada, and Tablazo resources are considered as unconventional.  The chance of discovery and the chance of development are also assessed in the report.

Sintana's CEO, Doug Manner, commented, "We are very pleased with the significant increase in our estimated prospective recoverable resources. In little more than a year, the Company has grown its asset portfolio in Colombia to a point where it has exposure to conventional and unconventional value creation opportunities in a number of highly prospective blocks. The Petrotech Report incorporates the updated information over the past year and provides further validation of the significant potential of our participation interests in the various formations underlying our VMM-37 license."

Definition of Prospective Resources

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.  Prospective resources have both an associated chance of discovery and a chance of development.  Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates, assuming their discovery and development, and may be sub-classified based on project maturity. Not all exploration projects will result in discoveries.  The chance that an exploration project will result in the discovery of petroleum is referred to as the "chance of discovery."  Thus, for an undiscovered accumulation, the chance of commerciality is the product of two risk components - the chance of discovery and the chance of development.

Uncertainty Categories

Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project.  Consequently, estimates of resources should generally be quoted as a range according to the level of confidence associated with the estimates.  An understanding of statistical concepts and terminology is essential to understanding the level of confidence associated with resources definitions and categories.  These concepts, which apply to all categories of resources, are outlined in Sections 5.5.1 to 5.5.3 of the report.

The range of uncertainty of estimated recoverable volumes may be represented by either deterministic scenarios or by a probability distribution.  Resources should be provided as low, best and high estimates as follows:

  • Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered.  It is likely that the actual remaining quantities recovered will exceed the low estimate.  If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.
  • Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered.  It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate.  If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
  • High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered.  It is unlikely that the actual remaining quantities recovered will exceed the high estimate.  If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

This approach to describing uncertainty may be applied to reserves, contingent resources and prospective resources.  There may be significant risk that sub-commercial and undiscovered accumulations will not achieve commercial production.  However, it is useful to consider and identify the range of potentially recoverable quantities independent of such risk. 

ABOUT SINTANA ENERGY

The Company is primarily engaged in petroleum and natural gas exploration and development activities in Colombia and Peru. The Company's exploration strategy is to acquire, explore, develop and produce superior quality assets with significant reserve potential.  The Company currently holds a 25% interest in the 175,000 acre Bayovar Block XXVII in the Sechura Basin, Peru. The Company's private participation interests in Colombia include 30% in 58,570 acres in the Talora Block and 30% in 272,021 acres in the COR-39 & COR-11 Blocks in the Upper Magdalena Basin. In the Middle Magdalena Basin, it has private participation interests of 100% in the conventional formations, and 30% in the unconventional formations, in the 43,158 acre VMM-37 Block and 25% (carried) in the 154,909 acre VMM-4 and 59,522 acre VMM-15 Blocks. In the Llanos Basin, the company has a carried 25% private participation interest in the 111,624 acre LLA-18 Block. These interests are subject to all applicable regulatory and governmental approvals, including those of Colombia's National Hydrocarbon Agency (ANH). The Company continues to evaluate a portfolio of exploration opportunities in South America.

On behalf of Sintana Energy

"Doug Manner"
Chief Executive Officer

Forward-Looking Statement

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following: the recognition of significant additional resources; the volumes and estimated value of Sintana's oil and gas resources.

The estimates of Sintana's resources provided herein are estimates only and there is no guarantee that the estimated resources with be recovered. In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Sintana which have been used to develop such statements and information but which may prove to be incorrect. Although Sintana believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Sintana can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: that Sintana will continue to conduct its operations in a manner consistent with past operations; results from drilling activities; the accuracy of the estimates of Sintana's resource volumes; availability of financing and/or cash flow to fund Sintana's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Sintana operates; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Sintana to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects in which Sintana has an interest in to operate the field in a safe, efficient and effective manner; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Sintana operates; and the ability of Sintana to successfully market its oil and natural gas products. The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statement, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: risks associated with the uncertainty of exploration results and estimates, inaccurate estimation of Sintana's oil and gas resource volumes, currency fluctuations, the uncertainty of conducting operations under a foreign regime, exploration risk, the uncertainty of obtaining all applicable regulatory approvals, the availability of labour and equipment, the fluctuating prices of oil and natural gas, the availability of financing and the Company's dependence on Sintana's management personnel, other participants in the property areas and certain other risks detailed from time-to-time in Sintana's public disclosure documents, (including, without limitation, those risks identified in this news release and Sintana's Annual Information Form).  Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE Sintana Energy Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that SD Times | BZ Media has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and commercial UAV markets.
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
Building custom add-ons does not need to be limited to the ideas you see on a marketplace. In his session at 20th Cloud Expo, Sukhbir Dhillon, CEO and founder of Addteq, will go over some adventures they faced in developing integrations using Atlassian SDK and other technologies/platforms and how it has enabled development teams to experiment with newer paradigms like Serverless and newer features of Atlassian SDKs. In this presentation, you will be taken on a journey of Add-On and Integration ...
Now that the world has connected “things,” we need to build these devices as truly intelligent in order to create instantaneous and precise results. This means you have to do as much of the processing at the point of entry as you can: at the edge. The killer use cases for IoT are becoming manifest through AI engines on edge devices. An autonomous car has this dual edge/cloud analytics model, producing precise, real-time results. In his session at @ThingsExpo, John Crupi, Vice President and Eng...
There are 66 million network cameras capturing terabytes of data. How did factories in Japan improve physical security at the facilities and improve employee productivity? Edge Computing reduces possible kilobytes of data collected per second to only a few kilobytes of data transmitted to the public cloud every day. Data is aggregated and analyzed close to sensors so only intelligent results need to be transmitted to the cloud. Non-essential data is recycled to optimize storage.
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" ...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
In their Live Hack” presentation at 17th Cloud Expo, Stephen Coty and Paul Fletcher, Chief Security Evangelists at Alert Logic, provided the audience with a chance to see a live demonstration of the common tools cyber attackers use to attack cloud and traditional IT systems. This “Live Hack” used open source attack tools that are free and available for download by anybody. Attendees learned where to find and how to operate these tools for the purpose of testing their own IT infrastructure. The...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...