Continued Production and Reserves Growth at Tanganyika
06 Februar 2008 - 7:30AM
Marketwired Canada
Tanganyika Oil Company Ltd. ("Tanganyika" or the "Company") (TSX
VENTURE:TYK)(OMX:TYKS) is pleased to provide an update on production, reserves
and ongoing operations.
Continued appraisal and development drilling, and cyclic steam stimulation
resulted in Syrian gross field production of 12,528 barrels of oil per day
("bopd") during January representing a 24% increase over average production
during Q4 2007. This increased gross production resulted in a 70% increase in
Tanganyika's net production during the same period.
Gross Oil Shipments Company Net Oil Shipments
(bopd - average) (bopd - average)
------------------------- -------------------------
Syria Syria
Total Tishrine Oudeh Total Tishrine Oudeh
Q3 2007 8,894 6,454 2,440 1,447 366 1,081
October 2007 9,198 6,675 2,523 1,700 550 1,150
November 2007 10,017 7,306 2,711 2,070 808 1,262
December 2007 10,997 7,946 3,051 2,800 1,281 1,519
------------------------- -------------------------
Q4 2007 10,070 7,309 2,761 2,190 880 1,310
January 2008 12,528 9,070 3,458 3,721 1,919 1,802
The continued production growth, through one of the coldest winters in recent
years, provides evidence of the Company's successful winterization program. In
addition, the reliability of the infield electrical system has improved
significantly with the upgrades implemented during 2007 resulting in improved
production stability.
Finally, the interim water treatment and disposal system continues to perform
during the dewatering process at Tishrine. The Company has observed the expected
decrease in water cut at multiple structural levels across the Jaddala reservoir
at West Tishrine.
2007 Reserves
DeGolyer and McNaughton Canada Limited have independently evaluated the
estimated crude oil reserves attributable to Tanganyika's participating
interests in its Syrian properties with an effective date of December 31, 2007.
The Company recorded a 10% increase in gross proven reserves, an 11% increase in
gross proven plus probable reserves and a 21% increase in gross proven plus
probable and possible reserves in comparison to its previously reported reserves
estimates effective December 31, 2006 (forecast prices and costs). The net
present value of future net revenue attributable to Tanganyika's Syrian reserves
increased over 120% during 2007 on both a proven and proven plus probable basis
(forecast prices and costs). This increase may be attributed to both an increase
in the gross Syrian reserves and an increase in forecast world oil prices. The
2006 reserve report forecast future realized prices during the term of
Tanganyika's Syrian production sharing agreements ranging from $33.49 to
$48.54/bbl. In line with increased world oil prices, the 2007 reserve report
forecasts future realized prices during the term of Tanganyika's Syrian
production sharing agreements ranging from $64.16 to $89.64/bbl. The drop in
Tanganyika's net reserves recorded during 2007 is expected given the improved
world oil prices. As prices increase, future barrels that are required for
Tanganyika to recover its costs under the production sharing agreement terms are
decreased and lower net reserves are recorded.
-----------------------------------------------------------------
Forecast Prices and Costs
-----------------------------------------------------------------
Percent Increase
December 31, 2007 December 31, 2006 (Decrease)
----------------------- ---------------------- ------------------
Net Net
Present Present Net
Value of Value of Present
Crude Future Crude Future Value of
Oil Net Oil Net Future
Reserves Revenue- Reserves Revenue- Crude Net
(million 10% (million 10% Oil Revenue-
barrels) Discount barrels) Discount Reserves 10%
-------------- ($ mill- ------------- ($ mill- ----------- Dis-
Gross Net ions) Gross Net ions) Gross Net count
-------------------------------- ---------------------- ------------------
Proved 185.0 67.7 1,370.0 168.3 88.8 603.0 10% (24)% 127%
-------------------------------- ---------------------- ------------------
Proved 851.4 328.5 5,726.0 764.8 428.7 2,336.0 11% (23)% 145%
plus
Probable
-------------------------------- ---------------------- ------------------
Proved 1,250.7 435.7 6,456.0 1,033.3 603.8 3,469.0 21% (28)% 86%
plus
Probable
and
Possible
--------------------------------------------------------------------------
Note: Net present value of future net revenue does not represent fair
market value
--------------------------------------
Original Oil in Place ("OOIP")
---------------------------------------------------------------------------
December 31 Increase
(million barrels) during 2007
These are the original oil ------------------ ----------------
in place amounts used in the million
reserve categories shown below: 2007 2006 barrels Percent
------------------------------------------------------- ----------------
Proved 4,695.8 4,918.6 (222.8) (4.5)%
------------------------------------------------------- ----------------
Proved plus Probable 7,384.7 6,441.1 943.6 14.6%
------------------------------------------------------- ----------------
Proved plus Probable and Possible 10,973.8 7,795.3 3,178.5 40.8%
---------------------------------------------------------------------------
Note: The Original Oil in Place (OOIP), as noted in the above table, is
equivalent to the discovered resource volumes on these lands. The
reserves attributed to the various reserve classification (Proved,
Proved plus Probable and Proved plus Probable and Possible) are
included in the discovered resource quantities. Reserves are those
quantities of oil forecast to be economically recoverable from a
discovered resource.
The significant increases in reserves and original oil in place recorded during
2007 result from Tanganyika's focused appraisal and development activities in
Syria, including:
- To date 3D seismic acquisition and interpretation across all major fields
(Oudeh: 210km2, Tishrine: 331km2, Sheikh Mansour: 156km2)
- Continued appraisal and developmental drilling success during 2007 (Oudeh: 18
wells drilled, Tishrine: 35 wells drilled)
- Extending the field limits of recoverable reserves at both West Tishrine and Oudeh
- Demonstrating economic production in a new reservoir at Tishrine (Chilou A)
- Demonstrating EOR potential from downspacing
- Expanding the thermal (steam) EOR pilot tests at the Oudeh and Tishrine fields
(Oudeh steam pilot expanded to 10 wells by the end of 2007, Tishrine steam pilot
expanded to 17 wells by the end of 2007)
The success of these programs is encouraging and supports the Company's plans to
expand both the thermal (steam) EOR pilot and drilling program during 2008 to
further enhance oil production rates and ultimate oil recovery from the
Company's operated fields in Syria.
Tanganyika's complete Statement of Reserves Data and Other Oil and Gas
Information (in accordance with National Instrument 51-101) will be publicly
available on or before February 28, 2008. The Company's Statement of Reserves
Data and Other Oil and Gas Information will be available through SEDAR at
www.sedar.com or on the Company's website at www.tanganyikaoil.com.
Increased Drilling Rig and Steam Generator Capacity
The first of three new drilling rigs has arrived and is being commissioned in
the field. The first additional rig is expected to commence drilling before the
end of February. The second additional drilling rig is in transit and due to be
unloaded in Syria in mid-February. Construction of the third additional drilling
rig is being completed in China and is expected to be shipped to Syria during
the second half of February. It is expected that these three additional drilling
rigs will increase the Company's drilling rig count to six by the end of the
first quarter.
An additional four steam generators are currently in transit to Syria and
expected to arrive in mid-February to begin steaming operations. These four
additional steam generators will increase the number of steam generators
operating in Syria to ten in total.
Tanganyika Oil Company Ltd. is a Canadian oil and gas company with production
and exploration assets in Syria. Its shares are traded on the TSX Venture
Exchange under the symbol TYK and its Swedish Depository Receipts trade on the
OMX Nordic Exchange under the symbol "TYKS".
Note Regarding Reserve Category Definitions:
Proved reserves are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves.
Probable reserves are those additional reserves that are less certain to be
recovered than proven reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the proven plus
probable reserves.
Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is only a 10-percent probability that
the quantities actually recovered will equal or exceed the sum of the proven
plus probable plus possible reserves.
Discovered resources are those quantities of oil and gas estimated on a given
date to be remaining in, plus those quantities already produced from, known
accumulations. Discovered resources are divided into economic and uneconomic
categories, with the estimated future recoverable portion classified as reserves
and contingent resources, respectively.
Forward-looking statements: This press release contains statements about
expected or anticipated future events and financial results that are
forward-looking in nature and, as a result, are subject to certain risks and
uncertainties, such as general economic, market and business conditions, the
regulatory process and actions, technical issues, new legislation, competitive
and general economic factors and conditions, the uncertainties resulting from
potential delays or changes in plans, the occurrence of unexpected events and
management's capability to execute and implement its future plans. Actual
results may differ materially from those projected by management.
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