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Gold/Mining/Energy : Scimitar Hydrocarbons, SIY:ASE -- Ignore unavailable to you. Want to Upgrade?

To: Grislee bear who wrote (621)	12/2/1999 5:10:00 PM
From: j.oil	Read Replies (1) \| Respond to of 864

From RB Here Is some info on Issran. It includes the Ryder Scott Evaluation your broker mentioned.The valuation doesn't line up that well but you can view it better on the SIY site. J ISSARAN OIL DEVELOPMENT PROJECT - EGYPT Scimitar's core project, Issaran, is an onshore oil field on the west side of the Gulf of Suez. The target reservoir zones are shallow, high porosity, dolomitic carbonates with an areal extent of 25 square kilometers, characterized by thick pays, with a proved primary reserve base of 15.1 million barrels valued at over $42 million U.S. (10% discounting). The area has excellent access for new seismic and well drilling programs. Transportation infrastructure is well developed and markets exist for project production. RESERVES ASSESSMENT (Ryder Scott, July 1998) Gross Oil in Place (Million Barrels): 545 Net Recoverable Company Reserves Net Present Value of Company Interest Escalating Pricing & Costs (US$Million) (Million Barrels) 0% 10% 12% 15% Proved Undeveloped 15.1 60.2 42.3 39.5 35.6 Probable Undeveloped 6.0 6.8 4.0 3.6 3.0 Possible Undeveloped* 126.8 871.9 114.5 82.1 51.2 Total Proved, Probable 147.9 938.9 160.8 125.2 89.8 and Possible * Reflects reserve potential under thermal recovery. Project Highlights Ryder Scott confirms that the NPV10 of the proved primary reserve base of Issaran is US$42 Million. Strategic alliance established with GPC that provides Scimitar with a means to realize benefits from existing GPC service contracts, including rig contracts. Scimitar granted full production rights to Issaran under November 1998 agreement. Petroleum Service Agreement (PSA) with GPC expands Issaran project area. Arabic version of Issaran PSA signed November 4, 1998. Agreement reached with Egyptian government on pricing formula for crude oil production. February 15, 1999 - Re-started field production. A November 1998 agreement with Egypt's General Petroleum Company, GPC (see News Release of November 30, 1998) grants Scimitar full production rights to the nine existing wells in the Issaran Field. The finalization of this agreement provides Scimitar with a core asset for growth of cash flow. On production, Scimitar retains 75% of revenues on incremental volumes before payout. No other taxes or royalties are payable by Scimitar. These superior terms allow Scimitar to pursue stage-wise assessment of the optimal recovery approach. On completion of an expanded 3D seismic survey (approximately 100 square kilometres as opposed to 60 square kilometres) Scimitar may, at its sole discretion, elect to amend the Project area (Issaran Field License) to include the entire 125 square kilometre Ras Issaran Concession, effectively doubling the Project Area. Scimitar sees significant development potential on these added lands. The terms of the expanded Project area would be the same as the PSA. In parallel with this initiative, Scimitar executed the Arabic version of the Issaran Field, PSA (see News Release of November 30, 1998). Concurrent with this signing, the Company also reached agreement with the Egyptian government with respect to a pricing formula for crude oil production from the Issaran Field. A 1999 work program including the drilling of three (3) wells has been submitted to the Issaran Operating Committee for their review and approval. Location of Issaran Field (also known as "Asran") (72Kb image) Structure Top Map, Issaran Field, Egypt (33Kb image) Development Plan Through a US$400,000 investment schedule, Scimitar has implemented a plan to reactivate the wells, which have been shut in for several months. The production re-start commenced on February 15, 1999. The following measures will improve field efficiency and performance: install heated production storage tanks (a mechanism that will reduce trucking fill and offloading cycle time costs - an operating cost reduction process) test screw pump technology (a Western Canadian pumping technology that improves well productivity) use results from the initial phase of development to refine and improve the reservoir model apply current Western Canadian heavy oil technology to develop a sophisticated integrated reservoir model as the basis for full field development utilize Western Canadian shallow well drilling techniques to further reduce costs drill up to 4 horizontal wells in the initial phase of development shoot a field wide 3D seismic program initiate thermal recovery design studies in fiscal 1999 apply knowledge from Western Canadian well workover/well re-completes to improve individual well and field wide performance (39Kb image) (33Kb image) Past visits to the Issaran field by Scimitar staff have confirmed that the area will have good surface conditions for new seismic and well drilling programs. Considerable potential exists for optimizing existing operations and for implementing large oil recovery increases via a thermal project. By the end of the first quarter 1999 the Company expects to be producing approximately 700 barrels of oil per day from the existing wells. Successful implementation of the aforementioned development plan is intended to double production by year end, 1999. Upside Potential Scimitar believes that the potential exists to improve primary production levels from the current 700 BOPD to in excess of 10,000 BOPD through the application of horizontal drilling technology. The company plans to test "Western Canadian developed" thermal recovery technology at Issaran, which could add further significant reserves. Ryder Scott confirms over 100 million barrels of possible thermal reserves having a value in excess of $100 million U.S.