Reserves
Operations
and Production
International
Sovereign Energy Corp.'s oil and gas reserves are determined
by the independent petroleum consulting firm of Chapman Petroleum
Engineering Ltd.
The
Company experienced a marked shift in the make-up of its reserves
during 2005. Gas now comprises approximately 62% of the proved
plus probable reserve base.
The
Company replaced its annual production and with new proved
plus probable reserves which increased the net present value
of the Company's reserves by 60% (at a 10% discount).
Total proved plus
probable reserves increased by 10% over the January 2004 levels.
Based on the Company's average production rates and proved plus
probable reserves, our reserve life index is approximately nine
years for oil and natural gas liquids and 17 years for natural
gas.
|
|
The table below presents the Company's proved plus probable
reserves before royalties as evaluated by Chapman Petroleum
Engineering Ltd. as at January 1, 2006.
| Reserves |
| |
Proved |
Probable |
Total |
 |
| Gas (mmcf) |
1,990 |
9,052 |
11,042 |
| Light & Med. Oil (mbbls) |
122 |
108 |
230 |
| Heavy Oil (mbls) |
278 |
286 |
565 |
| NGLs (mbls) |
27 |
144 |
171 |
|
| Total (mboe) |
759 |
2,047 |
2,806 |
|
The table below represents the discounted net present value
of future net revenue of the Company's reserves as at January
1, 2006.
| Present Value of Reserves |
$ Thousands
Present Value, before tax, discounted at |
|
10% |
|
| Proven |
|
14,053 |
| Probable |
|
29,907 |
|
| Total |
|
43,960 |
|
Chapmam Petroleum Engineering Ltd. conducts
continual surveillance and monitoring on a number of Benchmark
product prices both locally and internationally. Based on
historical data, current conditions and their view of the
relevant political and economic trends, they independently
prepare oil, gas and by-product price forecasts.
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