Kuwait Energy
EL-12-211107
4
must be appreciated that the Contingent Resources reported herein are unrisked
in terms of economic uncertainty and commerciality. There is no certainty that it
will be commercially viable to produce any portion of the Contingent Resources.
Prospective Resources are those quantities of petroleum that are estimated, as of
a given date, to be potentially recoverable from undiscovered accumulations by
application of future development projects. Prospective Resources have both an
associated chance of discovery, referred to herein as the Geological Chance of
Success (GCoS), and a chance of development. Prospective Resources include
Prospects and Leads. Prospects are features that have been sufficiently well
defined, on the basis of geological and geophysical data, to the point that they are
considered drillable. Leads, on the other hand, are not sufficiently well defined to
be drillable, and need further work and/or data. In general, Leads are significantly
more risky than prospects and therefore are not suitable for explicit quantification.
There is no certainty that any portion of the Prospective Resources will be
discovered. If discovered, there is no certainty that it will be commercially viable
to produce any portion of the resources. Prospective Resource volumes are
presented as unrisked, and are risk assessed only in the context of identifying the
stated GCoS. This dimension of risk assessment does not incorporate the
considerations of economic uncertainty and commerciality.
It should be noted that the reported Reserves, Contingent Resources and Prospective
Resources volumes are based on professional engineering judgement and are subject to
future revisions, upward or downward, as a result of future operations or as additional
data become available and should not be considered a guarantee or prediction of results.
Oil and condensate reserves and resources volumes appearing in this report have been
quoted at stock tank conditions. Natural gas reserves and resources volumes have been
quoted in standard cubic feet and are volumes of sales gas, after an allocation has been
made for fuel and process shrinkage losses. Standard conditions are defined as
14.7 psia and 60°F.
Use of Net Present Values
As part of this assessment, GCA has estimated a Net Present Value (NPV) for each
Reserves category (1P, 2P and 3P) as at the Effective Date of 31
st
May, 2014. It should
be clearly understood that the NPVs of future revenue potential of a petroleum property,
such as those discussed in this report, do not represent GCA’s opinion as to the market
value of that property, nor any interest therein. In assessing a likely market value, it
would be necessary to take into account a number of additional factors including reserves
risk (i.e. that Reserves may not be realised within the anticipated timeframe for their
exploitation); perceptions of economic and sovereign risk; potential upside; other benefits,
encumbrances or charges that may pertain to a particular interest; and the competitive
state of the market at the time. GCA has explicitly not taken such factors into account in
deriving the reference NPVs presented herein.
A glossary of abbreviations used in this report is contained in Appendix III. Historical
production and operating costs for the past three years are shown in Appendix IV.
