valuations and reserves

Valuations and reserves numbers are a moving feast. Every well drilled provides further information used to calculate valuations by analysts and reserves by company and independent experts. Trying to second guess them is an impossible task.

However here is food for thought!

Firstly reserve figures are calculated using analysis of a variety of information. Any previous contingent reserve calculations by CVN(11.68mmbls@ proved and probable net to CVN) were based on wells POE 9, L44G + D1 and L44H as per Annual report and AGM presentation with an oil column in the order of 30-40metres. This is now proved to at least 150 metres in the central fault as demonstrated by the last well L44H-D1. This will effect reserve calculations significantly. So too will the pressure data and production testing information gained from of NS2-D1, NS8-D1, NS5-D1, NS6-D1 and the last well L44H-D1.

Secondly, flow rates in the past 3 months and wellhead pressure data would tend to suggest that NSE field contains an aquifer or water drive mechanism therefore potentially significantly increasing total oil recovery. It is generally accepted that oil recoveries vary depending on the drive mechanism of the reservoir with water drive most effective for oil recovery.

All these factors will be instrumental in determining reserves and valuations and will be known in time however, lets not loose sight of the fact that any reserve calc’s previously mentioned by CVN were based on 30 June drilling to date. Things have changed dramatically since then.

Regards

Danash