SYS-CON MEDIA Authors: Roberto Medrano, Dmitriy Stepanov, Gilad Parann-Nissany, Srinivasan Sundara Rajan, Sean Houghton

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
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to th...
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo – to be held June 9-11, 2015, at the Javits Center in New York City, NY – is now accepting Hackathon proposals. Hackathon sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem. At Cloud Expo 2014 Silicon Valley, IBM held the Bluemix Developer Playground on November 5 and ElasticBox held the DevOps Hackathon on November 6. Both events took place on the expo fl...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big D...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...