Petrol Oil and Gas Announces Results of Independent Reserve Report
May 02 , 2005Petrol Oil and Gas, Inc. (OTCBB: POIG) announced today the results of an analysis of the Company's oil and gas reserves performed by McCune Engineering, an independent licensed petroleum engineering firm based in Baldwin City, Kansas. The firm, through its evaluation of Petrol's projects in Kansas and Missouri, determined that the Company's Proved Developed Reserves have a present value of about $32.5 million in net cash flow using a discount rate of 10% (a "PV10 analysis"). The report calculated that these reserve assets could also generate approximately $46.5 million in future cash flow, excluding the discount rate.
In addition to the Proved Reserves, the firm identified Probable Reserves from Petrol projects such as Petrol-Neodesha, Coal Creek, and Pomona in Kansas as well as the Missouri project in Cass County, Missouri that could generate discounted future net revenue of around $8.6 million, using a 10% discount rate. The Probable Reserves were assigned to Petrol's leased acreage where producing gas well locations are currently undrilled. McCune also estimated production levels for Possible Gas Reserves of about 26.25 Billion cubic feet, which were assigned to 140,000 untested acres.
"This independent reserve report confirms the potential of our leased mineral properties," said Paul Branagan, Petrol's President and CEO. "We believe the report highlights the combination of Petrol's low-risk properties with higher impact holdings and validates several of the acquisitions we recently completed. We are excited by the prospects for Petrol, and will use this report to further enhance our exploration and production activities."
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