SE. Stratic Eng

 

TIDMSE. 
 
RNS Number : 7389C 
Stratic Energy Corporation 
19 November 2009 
 

 
 
 
 
 
 
 
 
 
 
NEWS RELEASE 
 
 
West Don Reserves and Operations Update 
 
 
CALGARY and LONDON, November 19, 2009 - Stratic Energy Corporation (TSX Venture: 
'SE', AIM 'SE.') ("Stratic" or the "Company") provides an update on reserves and 
operating performance of its West Don field in the North Sea. 
 
 
In view of the importance of West Don as Stratic's main producing asset, the 
Company has commissioned an independent reserves review by Ryder Scott, the 
results of which indicate that ultimate recoverable reserves from the field will 
be approximately 9% lower than previously anticipated. However, as a result of 
low production levels in 2009, net remaining recoverable reserves at December 
31, 2009 are now estimated to be 1.72 million barrels at the proved level and 
2.84 million barrels at the proved and probable level, respectively 33% and 16% 
higher than estimated previously. Extracts from the Ryder Scott report are set 
out at the end of this press release. 
 
 
Stratic believes that first indications of pressure support from water injection 
are now evident in both West Don wells and production levels are beginning to 
improve. At present, water injection capability at the field is restricted by 
injection pump pressure limits, with ongoing trials to increase these limits 
over the next two months. In addition, work to improve the reliability of gas 
lift equipment ahead of the planned tie in to the Thistle facilities continues, 
and the tie in remains on schedule for the first quarter of 2010. 
 
 
Once connected to the Thistle facilities, offshore tanker loading will be 
discontinued, weather downtime should be significantly reduced and more 
consistent production levels achieved. In addition, Stratic now considers that a 
third production well will be required in the southern part of the field, as 
identified in the approved Field Development Plan ("FDP") and included in Ryder 
Scott's review. Stratic and its partners are in the process of evaluating this 
well, expected to be drilled in the summer of 2010, with production from the 
well expected to commence in late 2010. The pre-tax cost of the well to Stratic 
is estimated at $11 million. All of these factors - increased water injection 
rate, improved gas lift reliability, reduced weather downtime and the effects of 
a third production well - are expected to provide the potential for higher 
production levels in 2010 and beyond. 
 
 
As a result of the reduced water injection levels to date and continuing 
equipment issues during 2009, reservoir pressures are lower than originally 
anticipated in the FDP and therefore short-term peak production levels will also 
be lower. However, as a consequence of these features, future production levels 
are now expected to decline more gradually, with production rates beyond 2010 
expected to be substantially higher than originally planned. The effect on the 
future net present value of the field increases slightly despite the reduction 
in ultimate reserves. 
 
 
Commenting on West Don performance, Mark Bilsland, Chief Operating Officer, said 
"We have observed the beginning of pressure support in the West Don reservoir 
from water injection, which we view as a very positive event. The field operator 
is taking the necessary steps to increase the injection pump pressure levels and 
to resolve the issues on gas lift equipment, and we look forward to more 
consistent field performance once the tie-in to Thistle is complete. At current 
Brent oil prices of around $75 a barrel, the production levels indicated in 
Ryder Scott's recent report would yield pre-tax operating cash flows totaling 
over $80 million net to the Company in 2010 and 2011. Furthermore, it is clear 
that the future value of the field to the Company remains materially unchanged". 
 
 
 
 
 
 
Extracted results from the Ryder Scott reserve report dated November 18, 2009 
compared with the year end reserve data filed in the Company's Form 51-101 F1 
dated April 24, 2009; 
 
 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |      Ultimate      |     Remaining      | 
|                                       |    recoverable     |    reserves at     | 
|                                       |      reserves      | December 31, 2009  | 
+---------------------------------------+--------------------+--------------------+ 
|                                       | Proved  |  Proved  | Proved  |  Proved  | 
|                                       |         |   and    |         |   and    | 
|                                       |         |probable  |         |probable  | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
| Reserves (mmbbls) net to Stratic      |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
| Previous Ryder Scott report dated     |    2.29 |     3.49 |    1.29 |     2.44 | 
| April 24, 2009                        |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
| New Ryder Scott report                |    2.03 |     3.17 |    1.72 |     2.84 | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
| Movement in reserves                  |     -9% |      -9% |    +33% |     +16% | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
|                                       |         |          |         |          | 
+---------------------------------------+---------+----------+---------+----------+ 
 
 
 
 
The TSX Venture Exchange has not reviewed and does not accept responsibility for 
the adequacy or accuracy of the contents of this release. 
 
 
 
 
For further information contact: 
 
 
Kevin Watts, Chief Executive Officer         +44 207 766 7900 
Mark Bilsland, Chief Operating Officer          +44 207 766 7900 
John van der Welle, Chief Financial Officer    +44 207 766 7900 
 
 
Patrick d'Ancona, M: Communications           +44 207 153 1547 
 
 
Canadian Investor Relations 
Roger Fullerton                                 +1 952 929 7243 
Email: roger.fullerton@straticenergy.com 
 
 
Website: www.straticenergy.com 
 
 
 
 
About Stratic: 
 
 
Stratic Energy Corporation is a Canadian-incorporated international oil and gas 
business with production assets located principally in the North Sea. Its shares 
are listed on the TSX Venture Exchange in Toronto and on AIM, London and its 
principal operating office is in London, UK. 
 
 
 
 
Forward-looking statements 
This news release contains certain forward looking statements, which involve 
assumptions with respect to future plans, production levels and results, and 
capital expenditures. The reader is cautioned that all such forward looking 
statements involve substantial risks and uncertainties and the assumptions used 
in their preparation may not prove to be correct. Stratic's actual results could 
differ materially from those expressed in, or implied by, these forward looking 
statements and accordingly, the forward looking statements are qualified by 
reference to these cautionary statements. The forward looking statements 
contained herein are made as at the date of this news release. Stratic 
undertakes no obligation to update or publicly revise forward looking statements 
or information unless so required by applicable securities laws. 
 
 
 
 
TSX-V and AIM notifications 
The TSX Venture Exchange has not reviewed and does not accept responsibility for 
the adequacy or accuracy of the contents of this release. 
 
 
Stratic's Chief Operating Officer, Dr Mark Bilsland BSc (Geology), PhD 
(Petroleum Petrophysics), and member of the SPE, is the qualified person who has 
reviewed and approved the technical information in this announcement for the 
purposes of the AIM Rules for Companies (incorporating the Guidance Note for 
Mining, Oil and Gas Companies). 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCILFLALRLTLIA 
 

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