DIAZ RESOURCES LTD.
#1800, 633 Sixth Avenue SW Calgary, AB
T2P 2Y5 Canada
Tel: (403) 269-9889
Fax: (403) 269-9890
The following is for immediate release in Canada, October 26, 2012
DIAZ RELEASES SEPTEMBER 30, 2012 RESERVES EVALUATION Diaz Resources Ltd. (TSXV: "DZR") (the "Company" or "Diaz") today released an updatedStatement of Reserves Data and Other Oil and Gas Information effective September 30, 2012.
September 30, 2012 ReservesThe Company recorded a 27% decrease in proved plus probable reserves to 814 MBOE at September 30, 2012 compared with reserves of 1,121 MBOE at December 31, 2011. The net present value of the Company's reserves, before tax, using a 10% discount rate, decreased by
35% to $10.4 million, compared with $15.9 million at December 31, 2011.
The decrease in reserves was primarily due to reduced oil prices compared with the prices assumed in the independent reserves evaluation prepared effective December 31, 2011, and a reduction in the value of the Company's Lloydminster properties due to poorer than expected production performance.
The Company's September 30, 2012 reserves were evaluated in accordance with the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities by McDaniel and Associates Consultants Ltd. ("McDaniel"), independent reserves evaluators of Calgary, Alberta, in a report prepared by McDaniel dated October 12,
2012 and effective September 30, 2012 (the "McDaniel Report").
DIAZ RESOURCES LTD.#1800, 633 Sixth Avenue SW Calgary, AB
T2P 2Y5 Canada
Tel: (403) 269-9889
Fax: (403) 269-9890
The following summary is based on the McDaniel Report.
SUMMARY OF OIL AND GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE AS OF SEPTEMBER 30,2012
FORECAST PRICES AND COSTS
RESERVES
COMPANY TOTAL LIGHT AND NATURALGAS
MEDIUMOIL HEAVYOIL NATURALGAS LIQUIDS TOTAL TOTAL Gross Net * Gross Net* Gross Net * Gross Net* Gross Net*
RESERVES CATEGORY (MBbl) (MBhl) (MBbl) (MBbl) (MMcf) (MMcf) (MBbl) (MBhl) (MBOE) (MBOE)
PROVED
Producing 26.9 23.2 138.6 139.5 948.8 855.2 2.9 1.7 326.5 306.9
Non-producing 23.7 22.8 217.8 201.4 0.7 0.4 60.7 56.8
Undeveloped 114.6 109.7 114.6 109.7
TOTAL PROVED 26.9 23.2 276.9 272.0 1,166.6 1,056.6 3.6 2.1 501.8 473.4
PROBABLE 4.3 3.5 325.5 310.3 177.8 159.2 0.5 0.3 359.9 340.6
TOTAL PROVED PLUS
PROBABLE 31.2 26.7 602.4 582.3 1,344.4 1,215.8 4.1 2.4 861.7 814.0
*Net is the Corporation's working interest (operating and non-operating) share after deduction ofroyalty obligations, plus the Corporation's royalty interests
in production or reserves.
NET PRESENT VALUES OF FUTURE NET REVENUE
COMPANY TOTAL BEFORE INCOME TAXES AFTER INCOME TAXES DISCOUNTED AT (%per year) DISCOUNTED AT (%per year)
o 5 lO 15 20 o 5 10 15 20
RESERVES CATEGORY (MM$) (MM$) (MM$) (MM$) (MM$) (MM$) (MM$) (MM$) (MM$) (MM$) PROVED
Producing 5.02 4.56 4.25 4.00 3.81 5.02 4.56 4.25 4.00 3.81
Non-producing 0.84 0.74 0.65 0.58 0.52 0.84 0.74 0.65 0.58 0.52
Undeveloped 1.18 0.91 0.70 0.52 0.38 1.18 0.91 0.70 0.52 0.38
TOTAL PROVED 7.04 6.21 5.60 5.10 4.71 7.04 6.21 5.60 5.10 4.71
PROBABLE 7.68 6.03 4.82 3.92 3.22 7.68 6.03 4.82 3.92 3.22
TOTAL PROVED PLUS
PROBABLE 14.72 12.24 10.42 9.02 7.93 14.72 12.24 10.42 9.02 7.93
DIAZ RESOURCES LTD.
#1800, 633 Sixth Avenue SW Calgary, AB
T2P 2Y5 Canada
Tel: (403) 269-9889
Fax: (403) 269-9890
Pricing Used in EvaluationSUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS AS OF SEPTEMBER 30, 2012
FORECAST PRICES AND COSTS
OIL
WTI Edmonton Bow River
NATURAL GAS
Cushing Light Hardisty AECO NYMEX Inflation Exchange Oklahoma Par Price Par Price Gas Price Gas Price
YEAR Rate Rate ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/Mcf) ($US/Mcf)
Historical
2011 2.0% 1.011 95.10 95.00 78.55 3.70 4.00
2012 (9 mos) 2.0% 1.011 96.20 86.90 75.60 2.20 2.50
Forecast
2012 (3 mos) | 2.0% | 0.975 | 92.50 | 89.90 | 74.70 | 3.05 | 3.40 |
2013 | 2.0% | 0.975 | 92.50 | 91.90 | 76.70 | 3.55 | 3.90 |
2014 | 2.0% | 0.975 | 93.60 | 94.00 | 78.60 | 3.95 | 4.35 |
2015 | 2.0% | 0.975 | 95.50 | 96.90 | 81.30 | 4.50 | 4.95 |
2016 | 2.0% | 0.975 | 97.40 | 98.90 | 82.90 | 4.85 | 5.35 |
2017 | 2.0% | 0.975 | 99.40 | 100.90 | 84.60 | 5.30 | 5.85 |
2018 | 2.0% | 0.975 | 101.40 | 102.90 | 86.30 | 5.70 | 6.30 |
2019 | 2.0% | 0.975 | 103.40 | 105.00 | 88.00 | 5.80 | 6.40 |
2020 | 2.0% | 0.975 | 105.40 | 107.00 | 89.70 | 5.95 | 6.55 |
2021 | 2.0% | 0.975 | 107.60 | 109.20 | 91.60 | 6.10 | 6.70 |
2022 | 2.0% | 0.975 | 109.70 | 111.40 | 93.40 | 6.15 | 6.80 |
2023 | 2.0% | 0.975 | 111.90 | 113.60 | 95.20 | 6.30 | 6.95 |
2024 | 2.0% | 0.975 | 114.10 | 115.80 | 97.10 | 6.45 | 7.10 |
2025 | 2.0% | 0.975 | 116.40 | 118.20 | 99.10 | 6.55 | 7.20 |
2026 | 2.0% | 0.975 | 118.80 | 120.60 | 101.10 | 6.65 | 7.35 |
After | +2%/yr | +2%/yr | +2%/yr | +2%/yr | +2%/yr | +2%/yr | +2%/yr |
Detailed reserve information is contained in the Company's Statement of Reserves Data and Other Oil and Gas Information, which is available on the Company's SEDAR profile at www.sedar.com.
Diaz is an oil and gas exploration and production company based in Calgary, Alberta. Diaz's
current focus is on oil development and exploration in Alberta and Saskatchewan.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Robert W. Lamond, Chairman & CEO
DIAZ RESOURCES LTD. Telephone: (403) 269-9889
Fax: (403) 269-9890
TSXV: DZR
Donald K. Clark, Vice President Operations & COO
DIAZ RESOURCES LTD. Telephone: (403) 269-9889
Fax: (403) 269-9890
DIAZ RESOURCES LTD.
#1800, 633 Sixth Avenue SW Calgary, AB
T2P 2Y5 Canada
Tel: (403) 269-9889
Fax: (403) 269-9890
ADVISORY: Certain information in this news release, including
estimates of the Company's reserves and net present
value thereof, constitute forward-looking statements under
applicable securities laws and necessarily involve risks
including, without limitation, risks associated with oil and
gas exploration, development, exploitation, production,
marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, environmental risks,
competition from other producers, inability to retain
drilling rigs and other services, capital expenditure costs,
including drilling, completion and facilities costs, delays
resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from
internal and external sources. As a consequence, actual
results may differ materially from those anticipated in the
forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive.
The estimates of Diaz's reserves and the net present value
thereof provided herein are estimates only and there is no
guarantee that the estimated reserves will be recovered. In
addition, forward-looking statements or information are based
on a number of material factors, expectations or assumptions
of Diaz which have been used to develop such statements and
information but which may prove to be incorrect. Although
Diaz believes that the expectations reflected in such
forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking
statements because Diaz can give no assurance that such
expectations will prove to be correct. In addition to other
factors and assumptions which may be identified herein,
assumptions have been made regarding, among other things:
that Diaz will continue to conduct its operations in a manner
consistent with past operations; results from drilling and
development activities will be consistent with past
operations; the continued and timely development of
infrastructure in areas of new production; the accuracy of
the estimates of Diaz's reserve and resource volumes;
continued availability of debt and equity financing and cash
flow to fund Diaz's current and future plans and
expenditures; the impact of increasing competition; the
general stability of the economic and political environment
in which Diaz operates; the general continuance of current
industry conditions; the timely receipt of any required
regulatory approvals; the ability of Diaz to obtain qualified
staff, equipment and services in a timely and cost efficient
manner; drilling results; the ability of the operator of the
projects in which Diaz has an interest in to operate the
field in a safe, efficient and effective manner; the ability
of Diaz to obtain financing on acceptable terms; future
commodity prices; currency, exchange and interest rates;
regulatory framework regarding royalties, taxes and
environmental matters in the jurisdictions in which Diaz
operates; and the ability of Diaz to successfully market its
oil and natural gas products.
Where amounts are expressed on a barrel of oil equivalent
(BOE) basis, natural gas volumes have been converted to
barrels of oil at six thousand cubic feet (mcf) per barrel
(bbl). BOE figures may be misleading, particularly if used in
isolation. A bOE conversion ratio of six thousand cubic feet
per barrel is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. References to
oil in this discussion include crude oil and natural gas
liquids (NGLs).
The forward looking statements contained in this press
release are made as of the date hereof and Diaz undertakes no
obligations to update publicly or revise any forward looking
statements or information, whether as a result of new
information, future events or otherwise, unless so required
by applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
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