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REG - Hardy Oil & Gas - Publication of CPR and Independent Assessment
Released: 14/04/2010
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RNS Number : 1459K
Hardy Oil & Gas plc
14 April 2010
Immediate Release 14 April 2010
Hardy Oil and Gas plc
("Hardy" or "the Company")
Publication of CPR and Independent Assessment
Hardy Oil and Gas plc (LSE:HDY), the oil and gas exploration and production company with assets predominantly in India,
announces the publication of a Competent Persons Report of its Indian assets and an Independent Assessment of its Nigerian
assets.
A Competent Persons Report has been undertaken by Gaffney, Cline & Associates Ltd (GCA) assessing the Company's Indian
assets and an Independent Assessment report from RPS Energy (RPS) assessing the Company's Nigerian assets.
The GCA report highlights the significant prospective resource potential of the Company's Krishna Godavari Basin assets.
Set out below is a summary of the key highlights of the reports.
Key Highlights:
Reserves
· Total net Proven plus Probable (2P) oil Reserves increased to 2.9 MMBbl (June 2007: 2.7 MMBbl)
o Indian net 2P oil Reserves 2.5 MMBbl (June 2007: 2.7 MMBbl)
o Nigerian net 2P oil Reserves 0.4 MMBbl (June 2007: nil)
Contingent Resources
· Total net 2C gas Contingent Resources amount to 201 BCF (May 2009: 231 BCF)
o Indian net 2C gas Contingent Resources 158 BCF (May 2009: 160 BCF)
o Nigerian net 2C gas Contingent Resources 44 BCF (June 2007: 72 BCF)
· Total net 2C oil Contingent Resources amount to 2.6 MMBbl (June 2007: 3.1 MMBbl)
Prospective Resources
· D3 identified net risked Best Estimate gas Prospective Resources* (prospects) has increased to 350 BCF (May 2009:
250 BCF)
o The number of prospects has risen to 26 from 15
o As a result of the Dhirubhai 44 discovery in December 2009, the Miocene play type has been proven. Subsequently the
geological chance of success for the Miocene prospects has increased from 45 per cent to 70 per cent
o The overall resource potential in the D3 block has been enhanced relative to GCA's technical evaluation in May 2009
· D9 net risked Best Estimate gas Prospective Resources* (prospects and leads) remain substantial at 520 BCF (May
2009: 1,061 BCF)
o Net risked Best Estimate oil Prospective Resources (prospects and leads) unchanged at 18 MMBbl
* Aggregated risked Prospective Resources have been derived by Hardy and are not aggregated or provided as risked volumes
by GCA.
A summary and comparison of the reports is provided at the end of this announcement and complete reports can be downloaded
from Hardy's website www.hardyoil.com.
Commenting on the report, Yogeshwar Sharma, Chief Executive Officer of Hardy said:
"We are pleased to provide updated third party assessments on the Company's reserve and resources potential. Hardy
continues to be optimistic regarding the significant resource potential of the Company's Krishna Godavari Basin assets and
the potential to add and enhance production from our operated assets.
Three consecutive discoveries on the D3 exploration block have de-risked several play-types and the increase in number of
identified prospects has resulted in an upgrade of the block's risked gas Prospective Resources. D9 continues to hold
multi-TCF prospects as we continue the early stages of exploration in this extensive block."
Hardy will be hosting an Analyst Conference Call at 11:00 am to discuss this announcement. Please contact Chris McMahon at
Buchanan Communications on 020 7466 5000 for the teleconference dial in details.
For further information please contact:
Hardy Oil and Gas plc 020 7471 9850
Yogeshwar Sharma Chief Executive Officer Dinesh Dattani Finance Director
Arden Partners plc 020 7614 5917
Richard Day Matthew Armitt
Buchanan Communications 020 7466 5000
Mark Edwards Chris McMahon
Buchanan Communications
020 7466 5000
Mark Edwards
Chris McMahon
HARDY'S1 RESERVE AND RESOURCES SUMMARY AND COMPARISON TABLE
RESERVES (PROVEN PLUS PROBABLE)
Net PY-3 oil production from the date of the previous report (June 2007) to the effective date (December 2009) of GCA's
report was 0.38 MMBbl. The RPS report has provided for the reclassification of 0.41 MMBbl of oil from Contingent Resources
to undeveloped Reserves in Hardy's Oza block.
Current 3 Previous 3
RESERVES (Proven + Probable) 2 Gross Net Gross Net
PY-3 8 Producing Oil MMBbl 16.30 2.50 17.57 2.69
Oza 6 Undeveloped Oil MMBbl 3.12 0.41 - -
Total Reserves (Proven + Probable) Oil MMBbl 19.42 2.91 17.57 2.69
Total Reserves (Proven + Probable)
Oil
MMBbl
19.42
2.91
17.57
2.69
CONTINGENT RESOURCES (2C)
Net 2C gas Contingent Resources for India have essentially remained unchanged.
Current 3 Previous 3
CONTINGENT RESOURCES (2C) 2 Gross Net Gross Net
GS-01 B1 (Dhirubhai 33) Gas BCF 83.0 8.3 91.5 9.15
Atala 9 A1 Gas BCF 217.5 43.5 359.0 71.80
CY-OS/2 5,7 Ganesha 1 Gas BCF 130.0 97.5 144.0 108.00
D3 A1 (Dhirubhai 39) Gas BCF 210.0 21.0 210.0 21.00
D3 B1 (Dhirubhai 41) Gas BCF 213.0 21.3 213.0 21.30
D3 R1 (Dhirubhai 44) Gas BCF 98.0 9.8 - -
Oza 6 Oza Oil MMBbl 6.6 1.2 3.8 1.60
Atala Atala Oil MMBbl 6.3 1.3 7.5 1.50
Total Contingent Resources 2 (2C) Gas BCF 951.5 201.4 1,017.5 231.25
Oil MMBbl 12.9 2.6 11.3 3.10
Oil
MMBbl
6.3
1.3
7.5
1.50
Total Contingent Resources 2 (2C)
Gas
BCF
951.5
201.4
1,017.5
231.25
Oil
MMBbl
12.9
2.6
11.3
3.10
PROSPECTIVE RESOURCES
D3 Play Fairway - The play fairway methodology has not been employed for the current GCA report. Given further positive
drilling results and enhancement of the prospect inventory, GCA has undertaken to validate the identified prospects only.
Leads and yet to be identified leads have not been considered in this report. In relation to GCA's previous work, they
have noted "In summary, the overall resource potential in Block D3 has therefore improved relative to GCA's evaluation of
2009." 4
D3 - The total number of identified prospects has risen to 26 (May 2009: 15) with an average size of ~150 BCF per prospect.
As a result of the Dhirubhai 44 (R1) discovery, the geological chance of success of the Miocene prospects has increased
from 45 per cent to 70 per cent. As a result, the aggregated risked Best Estimate Prospective Resources for D3 have
increased by 56 per cent. As announced on 6 April 2010, the Company is currently drilling the exploration well KGV-D3-W1
to further evaluate Pliocene and Miocene prospects.
D9 - The overall risked Prospective Resources of the D9 block remains substantial. The data gathered from the KG-D9-A1
well has led to a reduction of the overall risked resource estimates, primarily in the middle Miocene. The number of
prospects remains relatively unchanged due to the addition of several new prospects. Direct Hydrocarbon Indicator (DHI)
techniques have shown positive results leading to relatively minor adjustments to the geological chance of success of
various prospects. The overall oil Prospective Resources in the Cretaceous and Palaeocene remain unchanged. The Company
anticipates re-commencement of exploration drilling in the second half of 2010.
Current 3 Previous 3
Risked Prospective Resources (Best Estimate) 1, 2 Gross Net Gross Net
CY-OS/2 5,7 Prospects Gas BCF 113 85 33 25
GS-01 Prospects Gas BCF 143 14 113 11
D3 Prospects Gas BCF 3,869 387 2,474 247
D9 Prospects and Leads Oil MMBbl 180 18 183 18
D9 Prospects and Leads Gas BCF 5,197 520 10,610 1,061
Assam Leads Oil MMBbl 2.5 0.3 - -
Total Risked Prospective Resources (Best Estimate) 1, 2 Gas BCF 9,321 1,006 13,230 1,345
Oil MMBbl 182 18 201 32
Total Risked Prospective Resources (Best Estimate) 1, 2
Gas
BCF
9,321
1,006
13,230
1,345
Oil
MMBbl
182
18
201
32
Notes:
1. Aggregated risked Prospective Resources have been derived by Hardy and are not aggregated or provided as risked
volumes by GCA.
2. The GCA and RPS reports have used the Petroleum Resources Management System published by the Society of Petroleum
Engineers, World Petroleum Council, American Association of Petroleum Geologists and Society of Petroleum Evaluation
Engineers in March 2007 (SPE PRMS) as the basis for its classification and categorisation of hydrocarbon volumes.
3. The above comparisons are based on today's published reports against estimates provided in the most recent
previously published reports. Previously published reports comprises a GCA Competent Persons Report (effective June 2007),
produced in conjunction with Hardy's Main Market listing prospectus, and a GCA Technical Evaluation report on D9 and D3
(effective May 2009).
4. As announced on 27 May 2009, GCA's Technical Evaluation (May 2009) employed, in addition to validating prospects
identified by Hardy, a play-based exploration methodology on the D3 block to address both the current prospect inventory
and the "yet to find" resource potential. Using the play based exploration methodology, the potential net risked Best
Estimate Resources for the D3 block was estimated at 950 BCF with a range of 150 BCF (low estimate) to 2,300 BCF (High
Estimate). This included identified prospects and leads and a number of postulated prospects based on the play area and
field size distribution.
Play-based exploration methodology - each play comprises currently identified prospects and leads and a number of
postulated prospects based on the play area and field size distribution. Volumetric estimates are made at both the
prospect and play level. In addition, Geological Chance of Success (GCOS) is assigned to all the prospects and leads.
5. With respect to Ganesha-1 (CY-OS/2) non-associated natural gas discovery, Hardy has presented a case to the
Ministry of Petroleum and Natural Gas, of the Government of India that supports our claim of entitlement to a licence
extension. In the absence of a resolution in our favour in the near future, we intend to refer the dispute for sole expert
or conciliation and arbitration.
6. As announced in April 2008, subsequent to the 2007 GCA Competent Persons Report Hardy reduced its working interest
in Oza from 40 per cent to 20 per cent via a farmout.
7. In the event of a commercial development of a discovery, ONGC has the option to back-into the CY-OS/2 licence at
an interest of 30 per cent.
8. On 19 April 2007 the PY-3 joint venture management committee had approved gross expected ultimate 2P oil Reserves
of 44.4 MMBbl. As of 31 December 2009 the field has produced 22.9 MMBbl with remaining 2P oil Reserves of 21.5 MMBbl (net
3.9 MMBbl).
9. Aggregated Contingent Resources for Atala have been derived by Hardy and are not aggregated by RPS.
10. The Company has filed the updated GCA Competent Persons Report (April 2010) with the Directorate General of
Hydrocarbons, of the Ministry of Petroleum and Natural Gas, of the Government of India ('DGH').
GLOSSARY OF TERMS
2C see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
2P see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
3D three dimensional
Assam block onshore exploration licence AS-ONN-2000/1, located in the north east of India, comprising 5,754 km2
AVO amplitude variations with offset supports the interpretation of various seismic anomalies being direct hydrocarbon indicators
Atala Nigeria marginal field concession located within OML 46, comprising 34 km2
BCF billion cubic feet
Best Estimate see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
Contingent Resources see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
CPR Competent Person's Report
CSEM constrained source electro magnetism survey
CY-OS/2 offshore exploration licence CY-OS/2, located in the southeast of India, comprising 859 km2 and operated by Hardy Exploration& Production (India) Inc
D3 offshore exploration licence KG-DWN-2003/1, located in the Krishna Godavari Basin off the east coast of India, comprising 3,288 km2
D9 offshore exploration licence KG-DWN-2001/1, located in the Krishna Godavari Basin off the east coast of India, comprising 11,605 km2
DGH Directorate General of Hydrocarbons of the Ministry of Petroleum and Natural Gas of the Government of India
Dhirubhai 39 gas discovery on KGV-D3-A1 announced on 13 February 2008
Dhirubhai 41 gas discovery on KGV-D3-B1 announced on 1 April 2008
Dhirubhai 44 gas discovery on KGV-D3-R1 announced on 22 December 2009
DHI direct hydrocarbon indicator
GCA Gaffney, Cline & Associates Ltd
GCOS geological chance of success
GS-01 offshore exploration licence GS-OSN-2000/1, located off the west coast of India, comprising 5,890 km2
km Kilometre
km2 square kilometre
Lead see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
MMBbl million barrels of oil
ONGC Oil and Natural Gas Corporation Limited
Oza Nigeria marginal field concession located within OML 11, comprising 23 km2
Prospective Resources see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
Prospect see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
PY-3 producing licence CY-OS-90/1
Reliance Reliance Industries Limited
Reserves see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
RPS RPS Energy of the RPS Group
TCF trillion cubic feet
MMBbl
million barrels of oil
ONGC
Oil and Natural Gas Corporation Limited
Oza
Nigeria marginal field concession located within OML 11, comprising 23 km2
Prospective Resources
see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
Prospect
see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
PY-3
producing licence CY-OS-90/1
Reliance
Reliance Industries Limited
Reserves
see guidelines laid out in the 2007 Petroleum Resources Management System, published by the SPE/WPC/AAPG/SPEE
RPS
RPS Energy of the RPS Group
TCF
trillion cubic feet
NOTES TO THE EDITORS
Hardy Oil and Gas plc is an upstream international oil and gas company whose assets are principally in India. Its portfolio
includes a blend of exploration, appraisal, development, and production assets. Hardy's goal is to evaluate and exploit
its asset base with a view to creating significant value for its shareholders.
Hardy Oil and Gas plc has existing production from an offshore field in India's Cauvery Basin. Hardy also has interests in
four offshore exploration blocks in India's Krishna Godavari, Saurashtra, and Cauvery Basins and one onshore exploration
block in the Assam Basin and two development licences in Nigeria.
Hardy is incorporated under the laws of the Isle of Man and headquartered in London, UK. Ordinary shares of Hardy were
admitted to the Official List and the London Stock Exchange's market for listed securities effective 20 February 2008 under
the symbol HDY.
The Company's Indian assets are held through the wholly owned subsidiary Hardy Exploration & Production (India) Inc,
located in Chennai, India. The Company's Nigerian assets are held through wholly owned subsidiary Hardy Oil Nigeria
Limited, located in Lagos, Nigeria.
For further information please refer to our website at www. hardyoil.com
This information is provided by RNS
The company news service from the London Stock Exchange
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