the trading halt is over, page-6

OIL RESERVES DETERMINED AT 18.6 MMBLS FOR TERTIARY RECOVERY AT
GRIEVE
HIGHLIGHTS
• Ryder Scott has provided an independent reserve certification of 18.6 million barrels of “Possible” (3P) reserves
for the proposed tertiary oil recovery program at the Grieve field in Wyoming.
• Ryder Scott has valued the tertiary oil recovery project at USD$305 million (unrisked NPV 10 base case).
• This study has relied upon a new detailed reservoir study conducted by Nitec LLC to conduct an economic
feasibility study of the proposed tertiary oil recovery program.
• In addition, the study provides a clear pathway for the future conversion of these reserves to the “Proven”
category.
SUMMARY
Elk Petroleum commissioned Ryder Scott (Denver) to arrive at a reserve determination which also involved a detailed
evaluation of the economic potential of the proposed tertiary oil recovery program for the Grieve Field (Wyoming). This
program will entail injecting carbon dioxide (CO2) into the Muddy Reservoir within the Grieve field to re-pressurise the
reservoir and extract incremental oil.
The Chairman of the Company, Dr Peter Power said “We are very pleased with the outcome of these studies and the
Ryder Scott reserves report. This report was a key requirement to progress negotiations for CO2 with our potential joint
venture partners and the receipt of this report is a major step forward for this project. There are numerous enhanced oil
recovery projects currently underway in the US and two independent studies have now confirmed our view of the exciting
oil recovery potential at the Grieve field. This project is a win-win situation. We are recovering incremental oil in a cost
efficient manner and sequestering approximately 9.5 million tonnes of CO2 which would otherwise be vented into the
atmosphere.”
RESERVOIR STUDIES
Ryder Scott requested that certain aspects of the study conducted by the Enhanced Oil Recovery Institute (EORI) at the
University of Wyoming in 2007 be reviewed further to enable them to provide a reserve assessment and an opinion on the
production potential of the Grieve Muddy reservoir from a carbon dioxide (CO2) flood. Nitec LLC (Denver), a specialised
reservoir engineering consulting firm was engaged to develop an independent reservoir model of the Grieve Muddy
reservoir. This study came to similar results to the EORI study of the proposed tertiary recovery program at Grieve. The
history match conducted by Nitec was in greater detail than the EORI approach and was carried out well by well,
compared with the field wide history match of the EORI study. Nitec evaluated a number of development options for the
field in terms of CO2 quantities, location and types of injection and producing wells, the benefits of simultaneous water
injection, etc.
ABN