Chinook's audited consolidated financial statements and its annual information form for the year ended December 31, 2012, which will include more detailed reserves information, are expected to be filed on SEDAR (www.sedar.com) on or about March 27, 2013.
Bir Ben Tartar - Discovered Petroleum Initially-in-Place
InSite assigned 201.7 million barrels of Discovered Petroleum Initially-In-Place ("DPIIP") to the Bir Ben Tartar (TT Field) discovery as at December 31, 2012.
DPIIP is the quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP is divided into commercial (reserves), and sub-commercial (Contingent Resources); the remainder is by definition unrecoverable. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.
Contingencies which must be overcome to enable the reclassification of Contingent Resources as reserves can be categorized as economic, non-technical and technical. The Canadian Oil and Gas Evaluation Handbook identifies non-technical contingencies as legal, environmental, political and regulatory matters or a lack of markets. There are several non-technical contingencies that prevent the classification of the Contingent Resources estimated below as being classified as reserves. Although certain areas of the blocks subject to the estimates are currently undergoing development under approved plans, these plans do not include the areas of the reservoirs with which all of the Contingent Resources summarized in the table below are associated. As of the effective date of the evaluation, information was not available concerning the regulatory status or, in certain instances, conceptual development plans under which such Contingent Resources could be brought on production, nor was information available regarding the likelihood of any such development plans being approved by Chinook, by its partners in the field, nor by ETAP. Other non-technical contingencies may include regulatory application submission with no major issues raised, access to markets and intent to proceed by the operator and other partners as evidenced by major capital expenditures planned. Technical contingencies that prevent the classification of the Contingent Resources as reserves include the early stage of development, the requirement for further delineation drilling and testing, lack of full field development plans and the associated facility design. While it is premature at this time to identify the economic viability of any of the Contingent Resources since evaluations are currently incomplete and as such, the economic status of the Contingent Resources is currently undetermined, Chinook is actively carrying out activities on the TT Field in order to enable it to complete the necessary economic assessment(s). Furthermore, certain of the reservoir areas evaluated in the Contingent Resources estimate cover extensive areas that will require considerable development activity and investment to fully exploit.
Estimates of DPIIP and Contingent Resources described herein are estimates only; the actual resources may be higher or lower than those calculated in InSite's report. There is no certainty that will be commercially viable to produce any portion of the resources described herein.
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