VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 09/23/14 -- Hanwei Energy Services Corp. (TSX: HE) ("Hanwei" or the "Company"), is pleased to announce that Sproule Associates Limited ("Sproule"), an independent qualified reserves evaluator, has prepared a report as of August 31, 2014 (the "Reserves Report") estimating reserves data and future net revenues for the Company's oil and gas properties in Leduc, Alberta (the "Leduc Lands"), in accordance with National Instrument 51-101.
The Reserves Report is the first reserves report issued by the Company since the acquisition of its Leduc Lands was completed and announced on May 5, 2014 (the "Acquisition"). The Reserves Report estimates as of August 31, 2014, total proved reserves (1P) at 547.4 Mboe (thousands of barrels of oil equivalent). Of note the vendor to the Acquisition commissioned a reserves report dated March 31, 2013 (the "Vendor Report" which was also prepared by Sproule) that previously indicated total oil and gas proved reserves (1P) in the Leduc Lands of 325.9 Mboe. The 68% increase in the proved oil and gas reserves of the Leduc Lands is principally due to the Company's initial work over activities undertaken prior to August 31, 2014.
In addition, the Reserves Report indicated total proved and probable oil and gas reserves (2P) of 1,198.1 Mboe (as compared to the Vendor Report indicating previous proved and probable reserves (2P) of 802 Mboe representing a 49% increase). The estimated net reserves of the Leduc Lands and future net revenues before income tax using various discount rates is summarized in the following table:
Net Present Value After Income
Remaining Reserves Taxes ($'000's)
--------------------- ----------------------------------
Company
Gross ------------- Discount Rate
Category (Mboe) 100% Gross Net 0% 5% 10% 15% 20%
------------------- --------------------- ----------------------------------
Proved Developed
Producing 307.3 249.3 205.1 3,656 3,336 3,075 2,857 2,674
Proved Undeveloped 240.1 240.1 197.8 5,609 4,601 3,806 3,167 2,644
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Total Proved 547.4 489.3 402.9 9,265 7,937 6,881 6,024 5,318
Probable Developed
Producing 215.5 197.1 160.1 5,234 3,764 2,906 2,364 2,000
Probable
Undeveloped 435.2 435.2 366.8 8,201 5,877 4,296 3,170 2,336
--------------------- ----------------------------------
Total Probable 650.7 632.3 526.9 13,436 9,641 7,202 5,534 4,336
--------------------- ----------------------------------
Total Proved +
Probable 1,198.1 1,121.7 929.8 22,700 17,578 14,083 11,559 9,654
The reserves shown above are estimates only and should not be construed as exact quantities. Proved reserves are those reserves which can be estimated with a high degree of certainty to be recoverable; probable reserves are those additional reserves, which are less certain to be recovered than proved reserves. A complete copy of the Reserves Report has been filed on SEDAR. The content of this press release has been reviewed by Sproule, as the Company's independent qualified reserves evaluator.
Hanwei's oil and gas production business is focused on enhancing its Leduc Lands asset base and growing its cash flow from operations through development drilling within its core project area. The Company intends to generate production opportunities possessing low to medium risk from multi-zone potential.
About Hanwei Energy Services Corp.
Hanwei Energy Services Corp.'s principal business operations are in two complimentary key segments of the oil and gas industry as both an equipment supplier to the industry (as a leading manufacturer of high pressure, fiberglass reinforced plastic ("FRP") pipe products and associated technologies serving major energy customers in the global energy market) and as an operator of its producing oil and gas mineral rights at its 4,000 acre Leduc Lands in Alberta.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES
Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company's Annual Information Form dated June 20, 2014 and Management Discussion and Analysis for the year ended March 31, 2014 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company's expectations as of the date of this press release.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.
Contacts:
Hanwei Energy Services Corp.
Graham Kwan
Executive VP, Strategic Development and Corporate Affairs
604-685-2239
gkwan@hanweienergy.com
Hanwei Energy Services Corp.
Yucai (Rick) Huang
Chief Financial Officer
604-685-2239
yhuang@hanweienergy.com
www.hanweienergy.com
