Growth Through Successful Exploration and Drilling Strategies
March 2 , 2009 NEWS RELEASE
For Immediate Release
NORDIC’S TOTAL PROVED PLUS PROBABLE HEAVY OIL RESERVES AT LLOYDMINSTER UP 49% IN 2008
Company Credited With More Than 800,000 Barrels of Heavy Oil at Lloydminster;
1,878 MMscf of Natural Gas and Coal Bed Methane at Joffre
WINNIPEG, MB. March 2, 2009 - Donald Benson, Chairman and Chief Executive Officer of Nordic Oil and Gas Ltd. (“Nordic” or the “Company”), today announced that the Company has received its 2008 independent Reserves and Engineering Report and will be filing its Statement of Reserves and Economic evaluation of Oil and Gas Properties, consistent with the requirements of Form 51-101, shortly.
Highlights
- Heavy Oil
- Total Proved plus Probable Reserves increased by 49% in 2008 to 805 MSTB, compared to 540 MSTB in 2007
- Total Proved Reserves (developed producing + developed non-producing + undeveloped) went from 125 MSTB in 2007 to 395 MSTB in 2008, a 216% increase
- Total Probable Reserves remained basically unchanged at 410 MSTB versus 415 MSTB in 2007
- Natural Gas + Coal Bed Methane
- Total Proved plus Probable Reserves were up 32% in 2008 to 1,878 MMscf versus the 2007 total of 1,427 MMscf
- Total Proved Reserves (developed producing + developed non-producing + undeveloped) increased 17% to 1,004 MMscf as compared to 857 MMscf last year
- Total Probable Reserves increased 53% to 874 MMscf compared to 570 MMscf in 2007
- The Net Present Value of Nordic’s estimated future net revenue based on forecast prices and costs, before Income Tax at 0% per year: $33.6 million ($14.4 million in 2007); at 5% per year: $25.7 million ($10.9 million in 2007); and, at 10% per year: $20.4 million ($8.7 million in 2007).
“This report clearly indicates that Nordic has shown strong production and reserve growth over the past two years, which in turn translated into our second highest revenue total in the Company’s history in 2008,” Mr. Benson stated. “This is especially significant given the sharp downturn in oil and gas prices during the last few months of the year.”
SUMMARY OF oil and gas reserves
BASED ON forecast prices and costs
Company Reserves
Heavy Oil
Natural Gas
Coal Bed Methane
Natural Gas Liquids
Gross
Net
Gross
Net
Gross
Net
Gross
Net
Reserves Category
MSTB
MSTB
MMscf
MMscf
MMscf
MMscf
Mbbl
Mbbl
PROVED
Developed Producing
145
134
288
251
56
53
1
1
Developed Non-Producing
0
0
388
329
273
235
0
0
Undeveloped
250
219
0
0
0
0
0
0
TOTAL PROVED
395
354
676
580
328
288
1
1
TOTAL PROBABLE
410
365
600
515
274
240
1
1
TOTAL PROVED + PROBABLE
805
719
1,276
1,095
602
528
2
2
SUMMARY OF net present values
BASED on forecast prices and costS
Net Present Values of Future Net Revenue
Before Income Tax
After Income Tax
Discounted at
Discounted at
0%/yr
5%/yr.
10%/yr.
15%/yr.
20%/yr.
0%/yr
5%/yr.
10%/yr.
15%/yr.
20%/yr.
Reserves Category
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
PROVED
Developed Producing
6,951
6,025
5,316
4,759
4,313
6,896
5,988
5,291
4,742
4,301
Developed Non-Producing
3,310
2,577
2,066
1,697
1,422
2,491
1,959
1,590
1,322
1,122
Undeveloped
5,630
4,512
3,624
2,908
2,324
4,162
3,251
2,533
1,958
1,492
TOTAL PROVED
15,892
13,114
11,005
9,364
8,059
13,549
11,199
9,413
8,022
6,915
PROBABLE
17,695
12,596
9,378
7,164
5,555
13,266
9,279
6,764
5,037
3,783
TOTAL PROVED PLUS PROBABLE
33,586
25,709
20,383
16,529
13,615
26,815
20,476
16,177
13,059
10,699
OIL AND GAS RESERVES AND NET PRESENT VALUES by production group
based on forecast prices and costs
Reserves
Net Present
Unit Values
Oil
Gas
NGL
Value (BIT)
@ 10%/yr
Reserve Group by Category
Gross
Net
Gross
Net
Gross
Net
10%
MSTB
MSTB
MMscf
MMscf
Mbbl
Mbbl
M$
Coal Bed Methane
Proved
Developed Producing
0
0
56
53
0
0
249
4.70
Developed Non-Producing
0
0
273
235
0
0
550
2.34
Undeveloped
0
0
0
0
0
0
0
N/A
Total Proved
0
0
329
288
0
0
799
2.77
Probable
0
0
274
239
0
0
676
2.83
Proved Plus Probable
0
0
603
527
0
0
1,475
2.80
Heavy Oil
Proved
Developed Producing
145
134
0
0
0
0
3,929
29.32
Developed Non-Producing
0
0
0
0
0
0
0
N/A
Undeveloped
250
219
0
0
0
0
3,624
16.55
Total Proved
395
354
0
0
0
0
7,553
21.33
Probable
410
365
0
0
0
0
7,273
19.93
Proved Plus Probable
805
719
0
0
0
0
14,825
20.62
Assoc & Non-Assoc Gas
Proved
$/MSCF
Developed Producing
0
0
288
251
1
1
1,138
4.53
Developed Non-Producing
0
0
388
329
0
0
1,516
4.61
Undeveloped
0
0
0
0
0
0
0
N/A
Total Proved
0
0
676
580
1
1
2,654
4.58
Probable
0
0
600
515
1
1
1,430
2.78
Proved Plus Probable
0
0
1,276
1,095
2
2
4,084
3.73
M$ means thousands of dollars
Notes:
[1] Includes Solution Gas
[2] Reserves shown as “0” reflect a value of less than 0.5 (MSTB/MMscf/Mbbl).
Columns may not add precisely due to accumulative rounding of values throughout the report.
Definitions:
- MSTB – 1,000 stock tank barrels of oil
- MMscf – million standard cubic feet of gas
- Mbbl – Thousand barrels
The evaluation and the classification of the Nordic reserves were conducted by Chapman Petroleum Engineering Ltd. as per the guidelines of the Canadian Oil and Gas Evaluation Handbook ("COGEH"). Complete definitions of these reserves classifications can be found within the COGEH. The reserve assignment is representative of the development of the Company’s property at Joffre, Alberta and Lloydminster, Alberta, however it does not include resources from Nordic’s Preeceville, Saskatchewan property.
The estimated values disclosed do not represent fair market value.
About Nordic Oil and Gas Ltd.
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the exploration and development of oil, natural gas and Coal Bed Methane in Alberta and Saskatchewan. The Corporation is listed on the TSX Venture Exchange and trades under the symbol NOG. Nordic is one of the “2008 TSX Venture 50” companies, a ranking of the top 10 public venture capital companies in five industry sectors listed on the TSX Venture Exchange.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the contents of this News Release.
This news release contains certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration and drilling success, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
For additional information, contact:
Donald Benson Don Bain
Chairman & CEO Corporate Secretary
Nordic Oil & Gas Ltd. Nordic Oil and Gas Ltd.
Tel: 204-956-5042 Tel. 204-229-7751
Fax: 204-897-7154 Fax: 204-943-1829
E-mail: dbenson57@shaw.ca E-mail: donbain1@mts.net
