MGY-T
Magin Energy announces corporate reserves and Copton activities
CALGARY, Feb. 18 /CNW/ - MAGIN ENERGY INC. (TSE: MGY) Magin announces the
results of its independent corporate reserves report prepared by Paddock
Lindstrom & Associates Ltd. (the ``Report') which was reviewed at a special
Audit Committee meeting. The Audit Committee met with the company's
independent reserve evaluators and external auditors.
Pursuant to the Report, at January 1, 2000, Magin has 22.0 million
barrels of oil equivalent (BOE) of proven reserves, 26.6 million BOE of
established reserves and 31.3 million BOE of proven plus probable reserves.
Established reserves include proven and 50% of probable reserves. Gas
conversion to BOE is based on ten thousand cubic feet per one barrel of oil.
Magin added 6.86 million BOE of proved reserves and 7.85 million BOE of
established reserves in 1999 through acquisition, exploration and development
activities. Based on unaudited capital expenditures of $57.5 million, finding
and development costs were $8.37 per proven BOE and $7.32 per established BOE.
This compares to $10.78 per proven BOE and $9.29 per established BOE in 1998.
Excluding 1999 capital expenditures related to the exploration project at
Copton, Alberta, finding and development costs were $6.94 per proven BOE and
$6.06 per established BOE. Reserves related to Copton will be booked in 2000.
Revisions to opening proven reserves in 1999 totaled 1.5 million BOE or 6%.
Due to competitive considerations, Magin and its partners at Copton have
not previously released information regarding drilling activity. Magin
participated in two wells during 1999 at Copton. One well was completed in a
Cretaceous gas horizon and tested at a rate of 6.2 million cubic feet (mmcf)
per day. A second zone had previously tested gas. The second well tested 4.0
mmcf per day out of 2 Cretaceous zones. Drilling of one additional well is
underway with a second to commence shortly. An additional 2 to 4 wells and a
23-mile pipeline is planned in 2000.
The company's net asset value based on established reserves valued in the
Report at a discount rate of 10% is $5.07 per basic share. The calculation
excludes value for seismic and includes $38.4 million for 403,000 net acres of
undeveloped landholdings valued by an independent evaluator as at December
31, 1999
Daily petroleum and natural gas sales averaged 9,367 BOE during 1999,
comprised of 6,164 barrels of crude oil and liquids and 32 mmcf of gas.
Audited financial results will be released following Audit Committee approval
on March 3, 2000.
The annual meeting of shareholders of Magin will be held on Friday, May
5, 2000 at 10:00 am at the Metropolitan Centre, Calgary. |
