By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-Oil and gas exploration and production company in Nigeria, Oando Energy Resources Inc; (OER) said on Thursday that its 2014 year-end summary reserves and resources for its assets in Nigeria increased significantly.

“The annual independent reserves and resources evaluation was undertaken by DeGolyer and MacNaughton (“D&M”), worldwide petroleum consulting group, and prepared in accordance with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” of the Canadian Securities Administrators (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGEH”). Reserves and other oil and gas information in this news release is effective December 31, 2014 unless otherwise stated,” OER said in a notice to the Nigerian Stock Exchange.

According to OER, it has significantly increased its reserves, both proved (1P) and proved and probable (2P) reserves, as a result of technical revisions and the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips company or theacquisition assetsversus the Form 51-101F1 and Form 51-101F2 filed for the year ended December 31, 2013;

OER says proved net reserves (1P) increased by 78 percent to 288.5 MMboe, while proved and probable net reserves (2P) increased by 82 percent to 420.3 MMboe.

The oil and gas exploration and production firm affirmed that the increase was largely due to recognising the precedence of the license renewal under the Nigerian Petroleum Act, which is the basis of the extension of the reserves beyond the current license limit.

However, it said best estimate (working interest) contingent resources (2C) correspondingly decreased by 78 percent from 547 MMboe to 122 MMboe as a result of the conversion of approximately 190 MMboe of 2C resources to 2P reserves due to the rebased evaluation utilising the economic life of the producing fields; “also, net negative revisions of 246 MMboe occurred due to the current crude oil price environment which has deemed certain contingent developments uneconomic; and lastly, the change in the interpretation of reservoirs by the independent evaluator,” the company said.

OER further affirmed unrisked and risked mean estimate prospective resources also decreased to 957.1MMboe and 229.6MMboe, respectively.

Also, it disclosed the economic value (NPV 10 percent of future net revenue) of the proved and probable reserves (2P) has increased by $545 Million (+44 percent) to $1,785 Million, largely due to the COP acquisition.

“We are very pleased with the new 2014 reserves numbers that confirms our thesis at the time we embarked on our transformative COP acquisition,” said Pade Durotoye, CEO of Oando Energy Resources. “This large reserves base gives us significant scope and opportunity to even further enhance production over the coming years and pursue in-field exploration opportunities that will further increase our resource base.”