OilVoice - Encore Acquisition Announces Year-End Reserves and Operating Results

Encore Acquisition Announces Year-End Reserves and Operating Results

Monday, February 01, 2010

Encore Acquisition Company has announced year-end 2009 reserves and certain fourth quarter 2009 operating results.

Proved Reserves
Total proved oil and natural gas reserves at December 31, 2009 were 220.3 million barrels of oil equivalent ("BOE"), consisting of 147.1 million barrels of crude oil, condensate, and natural gas liquids and 439.1 billion cubic feet of natural gas. Proved reserves were calculated utilizing twelve month average prices during 2009, or $61.18 per Bbl of oil and $3.83 per Mcf of natural gas. Prior year proved reserves were calculated based on year-end 2008 spot market prices of $44.60 per Bbl of oil and $5.62 per Mcf of natural gas.

Using 2009 average prices, the estimated discounted net present value of Encore's proved oil and natural gas reserves, before projected income taxes and net abandonment costs, using a 10 percent per annum discount rate ("PV-10 Value") was approximately $2.1 billion at December 31, 2009, as compared to a PV-10 Value of approximately $1.4 billion at December 31, 2008 using unescalated year-end 2008 prices.

At December 31, 2009, oil reserves accounted for 67 percent of total proved reserves, and 80 percent of total proved reserves are developed. The following table summarizes the changes in proved reserves:

MBOE
Reserves at December 31, 2008: 185,705
Purchases of minerals-in-place: 24,078
Sales of minerals-in-place: (117)
Extensions and discoveries: 21,502
Revisions of previous estimates: 4,774
Production: (15,669)
Reserves at December 31, 2009: 220,273

Encore's proved reserve estimates for 100 percent of its properties were prepared by independent petroleum engineers.

Fourth Quarter Operating Results
Encore's fourth quarter production averaged 45,143 BOE per day, consisting of 27,913 Bbls of oil per day and 103,382 Mcf of natural gas per day. This represents an increase of eight percent over the 41,824 BOE per day produced in the fourth quarter of 2008.

NYMEX oil prices averaged $75.98 per Bbl for the fourth quarter of 2009, and Encore's wellhead differential was a negative $8.04 per Bbl for the quarter. This represents a tightening in the differential of $3.85 per Bbl from the $11.89 per Bbl differential in the fourth quarter of 2008.

NYMEX natural gas prices averaged $4.17 per Mcf for the fourth quarter of 2009, and the Company's wellhead differential was a positive $0.49 per Mcf for the quarter as compared to a negative $0.99 per Mcf in the fourth quarter of 2008.