News

Oryx Petroleum Announces Update to its Year End 2014 Evaluation of Reserves

29 September 2015

Calgary, Alberta, September 29, 2015

Confirms the evaluation of 215 million barrels of estimated gross (working interest) proved plus probable oil reserves reflected in the year end 2014 evaluation of reserves

Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Corporation”) today announced it has received a letter dated September 28, 2015 (the “2015 NSAI Sensitivity Letter”) from Netherland, Sewell & Associates, Inc. (“NSAI”), an independent oil and gas consulting firm.

The 2015 NSAI Sensitivity Letter includes the results of NSAI’s assessment of the impact of 1) early water production experienced in wells completed in the Cretaceous reservoir at the Demir Dagh field, and 2) lower forecasted crude oil prices, on the Corporation’s gross (working interest) stock tank original-oil-in-place (“STOOIP”), gross (working interest) proved plus probable oil reserves estimates and related future net revenues attributable to the Hawler license area in the Kurdistan Region of Iraq as at December 31, 2014. Such estimates and related future net revenues were set forth in a report prepared in accordance with National Instrument 51-101 by NSAI dated February 16, 2015 (the “2014 NSAI Reserves Report”).

Highlights of the assessment as reflected in the 2015 NSAI Sensitivity Letter compared to estimates in the 2014 NSAI Reserves Report include:

• 215 million barrels (“MMbbl”) in gross (working interest) proved plus probable oil reserves confirmed, representing 79% of the 271 MMbbl per the 2014 NSAI Reserves Report, including:
  - 60 MMbbl in gross oil reserves attributable to the Demir Dagh Cretaceous reservoir representing 69% of the 87 MMbbl per the 2014 NSAI Reserves Report
  - 39 MMbbl in gross oil reserves attributable to the Banan Cretaceous reservoir, representing 61% of the 64 MMbbl per the 2014 NSAI Reserves Report
  - 44 MMbbl in gross oil reserves attributable to the Demir Dagh Jurassic reservoir representing 92% of the 47 MMbbl per the 2014 NSAI Reserves Report
  - 73 MMbbl in gross oil reserves attributable to the Zey Gawra Cretaceous reservoir is unchanged from the 2014 NSAI Reserves Report
  
  
• No change to NSAI’s best estimates of STOOIP as at December 31, 2014 for any reservoirs in the Hawler license area containing estimated proved plus probable reserves
• USD $953 million of after-tax net present value of future net revenue related to gross (working interest) proved plus probable oil reserves confirmed, representing 52% of USD $1.8 billion1 estimated in the 2014 NSAI Reserves Report

The assessment in the 2015 NSAI Sensitivity Letter assumes no changes to the assumptions as at December 31, 2014 reflected in the 2014 NSAI Reserves Report other than revised production profiles using a lower maximum peak plateau oil production rate from individual wells completed in the Demir Dagh and Banan Cretaceous reservoirs, additional operating costs per barrel of water to handle water production expected from the Cretaceous wells in the Demir Dagh and Banan fields, and an updated oil price forecast. As such, the assessment outlined in the 2015 NSAI Sensitivity Letter is a sensitivity analysis and does not represent a full reserves evaluation. The press release coincides with the filing on SEDAR at www.sedar.com of a material change report (the “Material Change Report”), which includes additional information derived from the 2015 NSAI Sensitivity Letter.

CEO’s Comment

Commenting today, Oryx Petroleum’s Chief Executive Officer, Michael Ebsary, stated:
“In light of our recent experiences producing from the Demir Dagh Cretaceous reservoir and the decline in commodity prices in 2015 we felt it appropriate for NSAI to conduct a sensitivity assessment of the impact of early water production and lower forecasted crude oil prices on our reserves base reported effective December 31, 2014. Notwithstanding the challenges we have encountered and the decline in commodity price expectations, the sensitivity assessment confirms the evaluation of a significant portion of estimated reserves and value reflected in the 2014 NSAI Reserves Report and related to our discoveries in the Hawler license area. Importantly, there are no changes to NSAI`s estimates of best estimate STOOIP as of December 31, 2014 for any reservoirs in which we have booked proved plus probable oil reserves.

We are continuing to evaluate adjustments to our plan to develop and maximize recovery from the Demir Dagh and Banan Cretaceous reservoirs.. Such adjustments could include, among other measures, the drilling of horizontal rather than the vertical and deviated wells we have drilled to date. We are also continuing with plans to develop the Demir Dagh Jurassic and Zey Gawra Cretaceous reservoirs where estimated reserves as of December 31, 2014 have not been materially impacted by the observed early water production in the Demir Dagh field. We currently intend to re-complete the Demir Dagh-3 well in the Jurassic reservoir this year and begin developing the Zey Gawra Cretaceous reservoir in 2016. We remain confident that we can realise substantial value for our shareholders from our asset base.”