Sky Petroleum, Inc., an oil and gas company, released the findings of a detailed report written in cooperation with McKinsey & Company, a consulting firm, assessing the potential value of the three exploration blocks, Four, Five and Dumre (the "Albanian Blocks").
According to a release, the report estimates the Albanian Blocks:
-contain a mean un-risked reserve potential of 875 million barrels of oil equivalent (MMBOE);
-with a conservative average success rate of approximately 24 percent, which would translate to a mean risked reserve potential of 220 MMBOE;
-have a potential market value of between $1 billion to $3 billion based on expected P90 reserves of approximately 105 MMBOE at $10 to 30 per barrel of oil equivalent (BOE); and
-possess a mean net present value of about $2.1 billion based on a stochastic discounted cash flow valuation of their likely commercialization.
According to the findings, which are based on previous reserve estimates, there are significant reserves contained in the Albanian Blocks. Each block has promising prospects with existing data, including seismic and well logs. The National Agency of Natural Resources of Albania ("AKBN") provided the company and its consultant access to previous reserves studies including one prepared by OMV, an oil-producing, refining and retail operating company.
"This report echoes that our efforts in Albania are well founded and will be highly accretive for the people of Albania as well as our shareholders," commented Karim Jobanputra, CEO of Sky Petroleum, Inc. "We are in the process of outlining our operational plan, which will be submitted to AKBN shortly."
Exploration Blocks Four, Five, and Dumre
Sky Petroleum noted that it has been granted exclusive rights under the Production Sharing Contract ("PSC") to three exploration blocks totaling approximately 5,000 km2 (1.2 million acres), representing approximately 20 percent of the landmass of Albania. In addition to the exploration rights, the company will also have access to more than 1,200 km of 2-D seismic data. The PSC has a seven-year term with three exploration periods. Upon commercial discovery of gas, the agreement allows for development and production periods of 25 years plus extensions at the Company's option.
Block Four is located in southeast Albania, bordering on Greece. The exploration block covers an area of approximately 2,264 km2 (540,000 acres). The area has four identified leads and prospects on the block with a total estimated reserve potential of 350 MMBOE.
Block Five is located in southwest Albania next to the Adriatic Sea and covers an area of approximately 2,076 km2 (498,000 acres). The block has a total of five identified prospects or leads with a total estimated reserve potential of 375 MMBOE.
Block Dumre is located immediately north of the Kucova oil field and covers an area of approximately 623 km2 (149,000 acres). Based on analogous discoveries, it is estimated that the Dumre prospect contains approximately 500 to 700 MMBOE OOIP