Americas Petrogas Inc is pleased to provide information on the Company's unconventional hydrocarbon resources for its interests in the Vaca Muerta, Lower Agrio and Los Molles shale formations only, within the Company's blocks located in Argentina's Neuquén Basin.
These resources were evaluated by the independent consultants Ryder Scott Company, L.P. ("Ryder Scott") and documented in a Report effective June 30 th, 2013 (the "Resource Report"). All of the Company's nine blocks with unconventional hydrocarbon resources were reviewed in the Resource Report, although not all of the potential resources and formations were evaluated.
The evaluations did not include formations with potential for tight reservoirs such as the Quintuco, Tordillo, Mulichinco and others.
The Contingent and Prospective Resources reported in this news release are in addition to the Oil and Gas Reserves as of December 31, 2012 as previously released and filed on SEDAR.
Barclay Hambrook, President & CEO of Americas Petrogas, commented, "We are delighted with the findings of Ryder Scott's independent evaluation of the unconventional resource potential across Americas Petrogas' Neuquén Basin blocks. This evaluation helps highlight the very large upside attributable to Americas Petrogas' unconventional shale acreage in the Neuquén Basin."
All values disclosed herein are net to Americas Petrogas' interest.
Highlights
Americas Petrogas, in the blocks evaluated, holds a total of 1,580,822 gross acres or 1,221,803 net acres on the (a) Los Toldos I, II, III and IV blocks (73,581 net acres); (b) Huacalera block (97,390 net acres); (c) Totoral, Yerba Buena and Bajada Colorada blocks ("Southern Concessions") (1,020,728 net acres); and (d) Loma Ranqueles block (30,104 net acres).
The independent resource evaluation was focused on the following geological formations: Vaca Muerta shale, Agrio shale and Los Molles shale.
The evaluation was based on complete data from the Company's five new exploratory wells drilled in the areas (100% exploration success) and from over twenty historical industry wells that penetrated the shales. Four of the five new shale wells have already been tested and the fifth will be tested in the near future. Data used included well electric logs, mud logs, full cores, side wall cores, rock sample analysis, geomechanical data, geochemistry studies, 3D and 2D Seismic and other data from Americas Petrogas' blocks plus important data from nearby blocks in close proximity.
The following are the most relevant results of this independent evaluation completed by Ryder Scott for Americas Petrogas' nine blocks that are part of this study:
(a) Best Case P50 total petroleum initially in place ("TPIIP"): 56.1 billion BOE, including,
· Best Case P50 Undiscovered PIIP ("UPIIP") of 55.2 billion BOE
· Best Case P50 Discovered PIIP ("DPIIP") 925 million BOE
(b) Best Case P50 total petroleum recoverable: 8.3 billion BOE, including,
· Best Case P50 contingent recoverable resources of 21 million BOE
· Best Case P50 prospective recoverable resources of 8.29 billion BOE
Please see the tables (and notes thereto) and narrative below for a detailed break-down of the calculation of these amounts.
Disclosure of Resources
The Resource Report has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGEH") and National Instrument 51- 101 – Standards for Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). The Resource Report provides a summary of the oil, liquids & natural gas resources associated with nine of Americas Petrogas' blocks in the Neuquén Basin, Argentina as at June 30, 2013. Americas Petrogas engaged Ryder Scott to provide evaluations of its contingent and prospective recoverable resources over the nine blocks with a focus on the Vaca Muerta shale, Agrio shale and Los Molles shale formations.
The Resource Report is based on certain factual data supplied by the Company and Ryder Scott's opinion of reasonable practice in the industry. The extent and character of ownership and all factual data pertaining to the Company's properties and contracts (except for certain information available in the public domain) were supplied by the Company to Ryder Scott and accepted without any further investigation. Ryder Scott accepted this data as presented and neither title searches nor field inspections were conducted. The recovery and resources estimates for Americas Petrogas' properties described herein are estimates only and there is no guarantee that the estimated resources will be recovered. The actual resources for Americas Petrogas' properties may be greater or less than those calculated.
Ryder Scott has also identified certain contingencies in order to convert the contingent recoverable resources described herein and in the Resource Report into developed reserves. These contingencies are specific to each formation and are related to the maturity of these projects and commercialization contingencies. There are no commercially productive analog fields in this area of the basin to establish expected production rates and recovery efficiencies at this time. There may be a risk that accumulations containing contingent resources may not achieve commercial production
