Highlights:
- Before-tax NPV10 for Proved (1P) reserves to U.S.$261 million representing NPV10 of C$2.34 per share.
- Before-tax NPV10 for Proved plus Probable (2P) reserves to U.S.$393 million representing NPV10 of C$3.51 per share.
- Before-tax NPV10 for Proved plus Probable plus Possible (3P) reserves to U.S.$439 million representing NPV10 of C$3.92 per share.
- 1P net reserves life index of 14.0 years and a 2P reserves life index of 21.8 years.
LNG Energy Group Corp. (TSXV: LNGE) (TSXV: LNGE.WT) (OTCQB: LNGNF) (FWB: E26) (“LNG Energy Group”) announced the results of an interim independent reserves assessment conducted by Petrotech Engineering Ltd. (“Petrotech”) in their report entitled “Evaluation of the Interests of LNGE Growth I Corp. in the Nipa-Nardo and Budare-Elotes Blocks in the Eastern Venezuela Basin, Venezuela” dated October 28, 2024, with an effective date of April 30, 2024 (the “Interim Reserves Report”).
On April 17, 2024, LNGEG Growth I Corp. (“LNG Venezuela”), a wholly-owned subsidiary of LNG Energy Group, entered into binding productive participation contracts (the “CPPs”) with PDVSA Petroleos S.A. (“PPSA”), a subsidiary of Petroleos de Venezuela S.A. (“PDVSA”), the Venezuelan national oil company, for the operation of the Nipa-Nardo-Nieblas and the Budare-Elotes onshore Venezuela (collectively, the “Venezuela Blocks”). LNG Venezuela has applied for a specific license from the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) in order to ensure that LNG Venezuela and all its stakeholders, including any U.S. persons operating in connection with the Venezuela Blocks, can do so in compliance with applicable U.S. economic sanctions laws.
All of the certified reserves set out in the Interim Reserves Report are located onshore Venezuela within 13 fields across the Nipa-Nardo-Nieblas and Budare-Elotes blocks. The acreage of the Venezuela Blocks is approximately 422,797 acres and consisting predominantly of light and medium crude oil of approximately 30 API on average.
“Venezuela is home to some of the world’s most precious oil and gas resources. We are very pleased to see the results of this independent reserves assessment and can clearly delineate a pathway now to showing that LNG Energy Group becoming a leader in the Latin American oil and gas industry. We have the assets, we have the reserves, we have the technical and operational team and we have amazing strategic partners with extensive operational experience,” commented Angel Roa, Chief Financial Officer of LNG Energy Group. “While it has been difficult for the market to fully appreciate what we have today, the release of this Interim Reserves Report hopefully contributes to a broader understanding. Given the opportunity, we will be able to reinvigorate these assets and unlock their full potential. We are excited about our accomplishments in Venezuela over such a short period of time and hopefully the release of this Interim Reserves Report enables all shareholders to appreciate the opportunity before us all.”
Angel Roa commented further: “It is very important to note that this Interim Reserves Report only covers approximately 15.5% of the existing well inventory for reactivations and considers no new locations. Today, these assets have gross production of approximately 2,890 bbl/d and 12 MMcf/d from 30 active wells; however, at peak historical production these assets were producing approximately 120,000 bbl/d from more than 1,000 wells.”
Venezuela Interim Reserves Report
For the period ended April 30, 2024, LNG Energy Group reported the following:
- The before-tax net present value at a 10% discount rate (“NPV10”) for the net 1P reserves is U.S.$261 million at April 30, 2024. See the Net Present Value Before-Tax summary.
- The before-tax NPV10 for the net 2P reserves is U.S.$393 million at April 30, 2024.
- The before-tax NPV10 for the net 3P reserves is U.S.$439 million at April 30, 2024.
- Total 1P net reserves of 11.9 MMboe(1) consisting of 70.1% light and medium oil and 29.9% conventional natural gas.
- Total 2P net reserves of 18.6 MMboe(1) consisting of 69.4% light and medium oil and 30.6% conventional natural gas.
- Total 3P net reserves of 21.7 MMboe(1) consisting of 67.9% light and medium oil and 32.1% conventional natural gas.
- As at April 30, 2024, 1P net reserves life index of 14.0 years and a 2P reserves life index of 21.8 years.
(1) Net reserves represent LNG Venezuela’s working interest after royalties. Probable and possible reserves have not been risked adjusted to make them comparable to proved reserves. See section entitled “Boe conversion”.
Reserves Life Index (“RLI”)(1)
Reserves Category: Total Proved (1P)
April 30, 2024 (Years): 14.0
Reserves Category: Total Proved Plus Probable (2P)
April 30, 2024 (Years): 21.8
Reserves Category: Total Proved Plus Probable Plus Possible (3P)
April 30, 2024 (Years): 25.4
(1) RLI does not have a standardized meaning and may not be comparable to similar measures presented by other companies and therefore should not be used to make such comparisons.
Net Present Value of Future Net Revenue Before Tax Summary(1)
Proved Developed Producing (PDP)
April 30, 2024 NPV10 (U.S.$M)(2): $135
April 30, 2024 NPV10 (C$/share)(3): $1.20
Proved Undeveloped (PUD)
April 30, 2024 NPV10 (U.S.$M)(2): $127
April 30, 2024 NPV10 (C$/share)(3): $1.13
Total Proved (1P)
April 30, 2024 NPV10 (U.S.$M)(2): $261
April 30, 2024 NPV10 (C$/share)(3): $2.34
Total Proved Plus Probable (2P)
April 30, 2024 NPV10 (U.S.$M)(2): $393
April 30, 2024 NPV10 (C$/share)(3):$3.51
Total Proved Plus Probable Plus Possible (3P)(4)
April 30, 2024 NPV10 (U.S.$M)(2): $439
April 30, 2024 NPV10 (C$/share)(3): $3.92
(1) See section entitled “Interim Reserves Report”. The full natural gas sales price assumptions are set out in the Interim Reserves Report and will be disclosed by the Company in accordance with applicable securities laws. Net reserves represent LNG Energy Group’s working interest after royalties. See section entitled About LNG Energy Group’s Venezuela Estimated Reserves.
(2) Includes FDC as at April 30, 2024 of U.S.$43.8 million for 1P reserves and U.S.$62.5 million for 2P reserves.
(3) Calculated by dividing the NPV10 value as at October 29, 2024 by 155,534,426 common shares issued and outstanding as at October 29, 2024 and using a U.S.$:C$ exchange rate of $1.39. The per share valuation does not attribute any value to the Company’s ownership of its drilling rigs or other assets.
(4) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of provided plus probable plus possible reserves.
Neither the TSXV nor its Regulation Services Provider accept responsibility for the adequacy or accuracy of this news release.
Unless otherwise indicated all reserves referenced in this news release are the Company’s working interest share before royalties. All dollar amounts in this news release and the Company’s financial disclosures are in United States dollars, unless otherwise noted.
