Posted: Dec 5, 2012 5:33 AM
Updated: Dec 5, 2012 5:33 AM
HOUSTON, TX -- (Marketwire) 12/05/12 -- Vanguard Energy Corporation (OTCQX: VNGE), an oil development and production company, announced today upon final analysis, that the third party reserve engineering firm, which certifies the Company's reserves, has increased the proved reserves to 725,882 barrels of oil. This growth in reserves demonstrates the viability of both the Batson Dome Field and the new well drilling program implemented by the Company.
The proved reserves final total represents an increase of 17% from the amount previously reported, concluding that there were estimated reserves of 716,000 barrels. The new total represents a 20% increase from the 595,000 barrels the Company had in reserves at its last fiscal year end of September 30, 2011.
The PV-10 valuation of the total is $43.4 million. This equates to a $7.6 million increase (21 from the valuation previously reported of $35.8 million. It also represents an increase of 36% over the Company's valuation at the end of it prior fiscal year ending September 30, 2011.
The Company produced approximately 48,500 barrels of oil from the Batson Dome Field this year. The reserve replacement rate of 270% is based on the finalized total of proven reserves. Of the total 725,882 barrels of proven reserves, approximately 30% is considered PDP (Proved Developed Producing), 12% is categorized as PDNP (Proved Developed Non-Producing) or behind pipe reserves and 58% is PUD (Proved Un-Developed).
The Company's plan to drill two new wells before the end of this calendar year remains on target. The first well was spudded this week near the last Batson Dome location that was very successfully drilled and completed. The second well is scheduled to be drilled at its recently acquired acreage at the Hull-Daisetta Field.
The Company engages an independent reservoir engineering company to evaluate its lease positions at the end of each fiscal year to determine the economic value of its proven reserves, assuming the production over time of all recoverable oil that is proven to be in place. Such calculation takes into consideration estimated future oil prices and the capital and operating costs that would be associated with such production. It then discounts those amounts at a 10% annualized rate. This is an industry standard report prepared for SEC reporting purposes. Although the amount of acreage reported on for these purposes was no greater than that of the prior year, the increase was due to the company's successful completion of new wells, which demonstrated more extensively the presence of oil in the ground. This is significant not only because of the amount of the increase upon final analysis and valuation, but also after taking into consideration the oil depletion from the reservoirs during the past year.
Mr. Warren Dillard, President of Vanguard Energy, said, "We were reasonably happy with the previous reserve report, so this significant upward revision in total proved reserves is very good news to the Company and our shareholders. Not only do we provide over $3.40 in PV-10 for every share of stock but the PUD component of our proved reserves provides ample room for production growth in the coming years as we work to accelerate our development drilling program."
About Vanguard Energy Corporation
Vanguard Energy Corporation (VNGE) is an oil drilling and production company with a focus on established oil fields in southeast Texas. Concentrating on oil properties in established areas with proven production history, Vanguard applies its managerial expertise to maximize production while minimizing risk. Vanguard is focused on creating shareholder value by building cash flow and oil reserves through an aggressive, focused acquisition and development program in the prolific southeast Texas oil producing region. Vanguard's initial area of operation is in the famous Batson Dome Field where it controls 500 strategic acres with substantial oil reserves. It has expanded its reach with the acquisition of a leasehold position in the Hull-Daisetta Field, about 10 miles south of Batson, confirming its plans to expand to new fields as part of its growth strategy. For more information visit the Company's web site at www.vanguardenergycorp.com.
This press release and other statements Vanguard Energy may make in the future contain forward-looking statements that relate to Vanguard's plans, objectives and future estimates. Various risks, uncertainties and other factors could cause actual results to differ materially from those expressed in any forward-looking statements. For a more detailed list of such risks, uncertainties and other factors, please refer to the Risk Factor section of Vanguard's Registration Statement on Form S-1 and in its periodic filings with the Securities and Exchange Commission. Vanguard makes no commitment to update any forward-looking statement, or to disclose any facts, events, or circumstances after the date of this release that may affect the accuracy of any forward-looking statement, except as may be required by applicable law.