News

Oryx Petroleum Announces its Year End 2015 Reserves and Resources

17 February 2016

Calgary, Alberta, February 17, 2016

Proved Plus Probable Oil Reserves of 238 MMbbl and USD 1.2 billion(1) in Related After-Tax Net Present Value of Future Net Revenue as at December 31, 2015

Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Corporation”) today announced its oil reserves and resources as at December 31, 2015 as evaluated by Netherland, Sewell & Associates, Inc. (“NSAI”), an independent oil and gas consulting firm, and as set forth in a report prepared in accordance with National Instrument 51-101 by NSAI dated February 17, 2016 (the “2015 NSAI Report”). The reserves and resources disclosure 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 Report.

Highlights of the report for Oryx Petroleum’s gross (working interest) oil reserves and resources volumes, and future net revenue related to oil reserves and development pending contingent oil resources in the Hawler license area as at December 31, 2015, as compared to estimates prepared by NSAI as at December 31, 2014 (the “2014 NSAI Report”) include:

• Proved plus probable oil reserves of 238 million barrels (“MMbbl”) versus 271 MMbbl as at December 31, 2014:
  - Revisions to the Demir Dagh and Banan Cretaceous volumes reflect the impact of revised development plans that incorporate a phased investment approach, constraints on peak production rates, use of horizontal wells, as well as lower capital costs and forecasted oil prices
  - Zey Gawra Cretaceous volumes unchanged with minor adjustment to the Demir Dagh Jurassic volumes
  
  
• After-tax net present value of future net revenue related to proved plus probable oil reserves of USD $1.2 billion(1) versus USD $1.8 billion(2) as at December 31, 2014:
  - Impact of adjusted volumes and lower forecasted Brent crude oil prices partially offset by significantly lower development costs associated with revised development plans for the Demir Dagh and Banan Cretaceous reservoirs
  
  
• Best estimate (2C) unrisked contingent oil resources of 146 MMbbl versus 187 MMbbl as at December 31, 2014:
  - Best estimate (2C) risked contingent oil resources of 30 MMbbl classified as “development pending” as at December 31, 2015 with related after-tax net present value of net contingent cash flow of USD $85 million(1)
  - Revisions to unrisked Demir Dagh Cretaceous volumes and application of a risking factor for chance of development to all contingent oil resources volumes
  
  
• Best estimate unrisked prospective oil resources of 1,343 MMbbl versus 929 MMbbl as at December 31, 2014, reflecting:
  - Initial identification of prospects and leads in the AGC Central license area
  - Identification of a new prospect and re-mapping of prospects and leads in the Haute Mer B license area with the benefit of 3D seismic data
  - Increased working interest in the Wasit license area
  
  

Highlights of the report for Oryx Petroleum’s gross (working interest) oil reserves, and future net revenue related to oil reserves in the Hawler license area as at December 31, 2015, as compared to a sensitivity assessment contained in a letter from NSAI dated September 28, 2015 (the “2015 NSAI Sensitivity Letter”)(3) include:

• 11% increase in proved plus probable oil reserves reflecting:
  - Impact of revised development plans for the Demir Dagh and Banan Cretaceous reservoirs that incorporate the use of horizontal wells and higher resulting peak production rates offset by the impact of lower forecasted oil prices in early years of forecast
  
  
• 28% increase in the after-tax net present value of future net revenue related to proved plus probable oil reserves reflecting:
  - Significantly lower development costs associated with revised development plans for the Demir Dagh and Banan Cretaceous reservoirs more than offsetting impacts of lower forecasted Brent crude oil prices and a more gradual production increase and lower field plateau production rates
  
  

CEO’s Comment

Commenting today, Oryx Petroleum’s Chief Executive Officer, Michael Ebsary, stated:

“We are pleased to report a positive outcome for our reserves and resources at year end 2015 as evaluated by NSAI. Our reserve and resource estimates have been impacted by the lower for longer outlook for commodity prices that is impacting all oil and gas companies but also by production constraints necessary to manage expected water production in the Demir Dagh and Banan Cretaceous reservoirs. However, our team has worked diligently to revise our development plans that now reflect the utilisation of horizontal wells and a phased development approach. The revised plans have resulted in estimated volumes for the affected fields exceeding those we reported in September 2015. In addition, the revised plan requires significantly lower capital investment than estimated previously as a result of a substantial reduction in well count. Our reserve and resource base remains sizable and we look forward to getting through this difficult period for the oil industry and implementing our revised development plans and growing our production and reserve and resource base.”

(1) This estimated value is calculated using a 10% discount rate and is valid as at December 31, 2015. Estimated value of future net revenue does not represent fair market value. See the Material Change Report for additional information regarding these estimated values.
(2) This estimated value is calculated using a 10% discount rate and is valid as at December 31, 2014.
(3) 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) original-oil-in-place , gross (working interest) proved plus probable oil reserves estimates and related future net revenue attributable to the Hawler license area in the Kurdistan Region of Iraq as at December 31, 2014. See the “Reserves and Resources Advisory” below for cautionary language regarding the 2015 NSAI Sensitivity Letter.