Lundin announced that as at December 31, 2011 its net proven and probable working interest reserves are 210.7 million barrels of oil equivalent (MMboe) which equates to a 21 percent increase to reserves and a reserve replacement ratio of 264 percent, when compared to December 31, 2010.
The reserves are based upon a third party independent audit conducted by Gaffney Cline and Associates (“GCA”). The Proven and Probable Reserves have been calculated using 2007 Petroleum Resources Management System (SPE PRMS) Guidelines of the Society of Petroleum Engineers (SPE), World Petroleum Congress (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE) and have been reviewed for compliance with the Canadian Oil and Gas Evaluation Handbook (COGEH) and the Canadian National Instrumental 51-101 Standards of Disclosure for Oil and Gas Activities. The reserves were calculated using an oil price of USD 100 per barrel in 2012, with prices and costs escalating at 2 percent per annum.
Oil accounts for 85 percent of the total Proven and Probable Reserves. In addition 98 percent of the reserves are located in countries with a tax/royalty regime.
Increases in proven and probable reserves were mainly recorded in Norway. Reserves increases are related to the producing assets, Alvheim and Volund as well as the Luno field where reserves increased as a result of the inclusion of the Tellus discovery and updated reservoir models. Furthermore reserves for the Bøyla development were included for the first time. Reserves in Norway further increased due to the acquisition of an additional 20 percent interest in the Brynhild field.
In addition to its reserves Lundin Petroleum has further assets classified as Contingent Resources with “Best Case” values (as defined by the COGEH) of 731 MMBoe in aggregate of which oil accounts for almost 92 percent. The Contingent Resources include contributions from the Avaldsnes field in Norway and the Cempulut, Titik Taran and Tarap discoveries in Malaysia. These Contingent Resources have been audited by GCA. Furthermore Lundin Petroleum has an interest in the Aldous Major South discovery in Norway. Including the mid point of the Aldous Major South operator’s resource estimates increases Lundin Petroleum’s Contingent Resources to a total of 851 MMBoe.
Ashley Heppenstall President CEO of Lundin Petroleum commented, “We are extremely pleased that our net reserves and contingent resources have increased to over one billion barrels. In Norway new reserve additions at Tellus and Bøyla as well as reserve upgrades at Alvheim and Volund have contributed to another year of reserve increases and a strong reserve replacement ratio. The Avaldsnes/ Aldous Major South appraisal and discovery has resulted in a significant increase to our contingent resource base and will lead to further reserve increases as this project is moved forward.”