17 November 2008 Tirana — A new independent oil report release by Manas petroleum estimates the value of its unproven Albania oil discovery to be as much as $11.9 billion (9.3 billion).
Vast and untouched reserves of oil and gas have been discovered in northern Albania, Manas announced in January.
The report was compiled by Gustavson Associates LLC on behalf of Manas Petroleum Corporation, which has been awarded a contact by the Albanian government to explore the north of the country for oil and gas reserves.
According to their findings, the unproven reserve holds up to 2.987 billion barrels of oil and 3.014 trillion cubic feet of natural gas.
However if the oil is capped with a layer of gas, Gustavson calculates the field to total 1.4 billion barrels of light oil and 15 trillion cubic feet of natural gas.
And in the event that only gas is present, the reserve is expected to contain 28 trillion cubic feet of natural gas.
As a final economic result Gustavson calculates for a partial success of the oil case of $11.9 billion, ($18.6 billion complete success), for the oil with gas cap of $6.3 billion ($9.7 billion complete success) and for the gas case of $6.1 billion ($10.8 billion complete success).
The capital expenditures in the total failure scenario are calculated as $67 million.
Gustavson estimates the oil and gas rates for each of the prospects based on flow rates from the nearby Cacran field and the Occidental Spiragu-1 well test rates in Block 2 (Block 2 is adjacent to block E and was recently awarded to Manas).
The report assumes that only two rigs are used concurrently to explore, appraise and develop all opportunities. “Therefore,” the report summarizes” the economics or NPV10 in this report is considered to be conservative”.
The results of the economic modeling by Gustavson Associates LLC are summarized in the table below.
Parameters Oil Oil with Gas Cap Gas
Complete Partial Complete Partial Complete Partial
Success Success Success Success Success Success
Oil production
MM Blb 3’024 1’515 1’389 700 280 141
MM Tonnes 413 207 189 95 38 19
Gas production
BCF 3’050 1’530 13’691 7’743 29’639 14’928
BCM 86 43 388 219 839 423
NPV10 USD B USD 18.6 USD 11.9 USD 9.7 USD 6.3 USD 10.8 USD 6.1
Source: Gustavson Associates LLC, November 1, 2008
The Balkans region has proven oil reserves totalling approximately 345 million barrels.
Of that, 198 million barrels is located in Albania .
Proven natural gas reserves in the Balkans region add up to approximately 2.7 trillion cubic feet.
Under the licence awarded to Manas Petroleum Corporation, the company is allowed to explore oil and gas reserves in an area approximately 780,000 acres in size, located along a geological fold in north-western Albania.
‘The probability of success for a wildcat well in a structurally complex area such as this, is relatively high due to the fact that there exists a proven hydrocarbon source and analogous production exists only 20 to 30 km away,’ notes Gustavson in the report.
Manas is currently still analysing the findings and will make further announcements on its next steps in the coming weeks.
The corporation is an important player in the development of Albania’s terrestrial oil and gas reserves.
In December 2007, Albania’s Council of Ministers agreed to allow DWM Petroleum AG, a subsidiary of Manas, to assist in the exploration, development and production of Albania’s land-based hydrocarbon reserves in conjunction with the government’s Agency of Natural Resources.
About Gustavson & Associates LLC
Gustavson & Associates is an independent Boulder Colorado, USA based global consulting firm which specializes in natural resource evaluation. In the case of the petroleum industry it has a 25 year record of providing services including expert testimony, reserve estimates, integrated reservoir studies, appraisals and economic analysis. Gustavson’s provides its services to Financial Institutions, Government agencies and major international energy companies including Agip, Chevron, Shell, ExxonMobil, Conoco, Chase and the Shanghai Petroleum Corporation.
The resources reported here have been estimated by Gustavson in accordance with resource definitions from the Canadian Oil and Gas Evaluation Handbook, the standard called for in the Canadian National Instrument 11/01/2008 3-2 Gustavson Associates 51-101 Oil And Gas Resource Reporting Guidelines. The estimates are also in accordance with the resource definitions in the recent “Petroleum Resources Management System,” issued by the Society of Petroleum Engineers and the World Petroleum Congress in March 2007. The National Instrument requires disclosure of specific information concerning prospects, as will be provided in the report.
