Vanguard Energy Corporation (OTCQX: VNGE), an oil development and production company, today announced that as of September 30, 2012 the value of its proven oil reserves based on a PV-10 calculation had risen to $35.8 million, up 13% over the same date a year ago.
This PV-10 valuation is based on 620,000 barrels of proven reserves, which is an increase of approximately 3% over the comparable amount at September 30, 2011, and is after a year in which the Company produced approximately 48,500 barrels of oil from the field, giving it a reserve replacement rate of 125%. This growth in proved reserves demonstrates the viability of both the Batson Dome Field and the new well drilling program implemented by the Company. Further, it reported that production grew from 3,350 barrels per month in October 2011 to 6,300 barrels in October 2012, a demonstration of the growth trajectory of the Company.
Of the total 620,000 barrels of proven reserves, approximately 30% is considered PDP (proved developed producing), 12% is categorized as PDNP (proved developed non-producing) or behind pipe reserves and 58% is PUD (proved un-developed). This PUD component provides the Company with substantial growth opportunity through a low-cost, low-risk development drilling program.
The Company recently announced that two new wells are scheduled to be drilled before the end of the calendar year, which should not only further increase production, but also continue the trend of moving reserves to the Proved category. Of these new wells one will be the first well drilled at its recently acquired acreage at the Hull-Daisetta Field.
The current reserve report contains no reserves attributable to this field.
The Company engages an independent reservoir engineering company to evaluate its lease positions at the end of each fiscal year to determine the economic value of its proven reserves, assuming the production over time of all recoverable oil that is proven to be in place. Such calculation takes into consideration estimated future oil prices and the capital and operating costs that would be associated with such production, and then discounts those amounts at a 10% annualized rate. This industry standard report is prepared for SEC reporting purposes. Although the amount of acreage reported on for these purposes was no greater than that of the prior year, the increase was due to the company's successful completion of new wells which demonstrated more extensively the presence of oil in the ground. This is significant not only because of the amount of the increase, but also after taking into consideration all of the oil that had been taken from the reservoirs during the past year.
Source: Vanguard Energy Corporation
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