Southern Energy Corp (TSX-V:SOU, AIM:SOUC, OTC:MAXMD) has issued a year-end corporate update highlighting its improving oil and gas reserves.
The company reported an increase in proved, developed producing reserves of 25% to 6.2 million barrels of oil equivalent (boe), an increase in total proved reserves of 44% to 14.1 million boe and an increase in total proved plus probable reserves by 31% to 25.5 million boe all in 2022.
The company’s net present value, even discounted at 10%, was $142.5 million, up 61% from the end of 20221.
"We are excited to report another year of material reserves growth in all major categories for the company, highlighted by conservative additions to our Gwinville horizontal Selma Chalk inventory following our successful appraisal program in 2022,” chief operating officer Gary McMurren said in a statement.
“In our current development program, we will be testing two Lower Selma Chalk and two City Bank horizontal laterals with our modern completion design. The Lower Selma Chalk has only minimal reserve bookings in this year's report, and we have yet to book any City Bank development reserves, so upon completion of these horizons over the next few months, we expect to continue to add significant and predictable reserves growth in Gwinville for years to come.”
In response to the current low natural gas prices, Southern plans to moderate the Gwinville organic growth program from the planned capital budget of US$101 million announced in November 2022 to approximately US$55 million, the company said.
Under its revised capital plan, the company will have drilled seven horizontal wells at the Gwinville asset, completed three wells, and have four wells remain as drilled but uncompleted to be brought on in the future once natural gas prices are more supportive
"Although the drop in natural gas prices has brought us to the decision to moderate our Gwinville capital program, the overall impact of the applied learnings from the 2022 appraisal program have paid off and we are happy with the early results,” CEO Ian Atkinson said.
“In the current program, we have drilled seven horizontal wells with longer laterals than the original appraisal wells in half the time on a per-well basis and proven that the re-interpretation of our 3D seismic has improved our overall ability to stay within the targeted zone. We have positioned ourselves for the inevitable rebound in natural gas prices and look forward to moving equipment and manpower back into the Gwinville field quickly as price recovery occurs to re-initiate our organic growth plans and take advantage of maximising cashflows at the opportune time."
The full year-end report can be found here.
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