24 January 2014
Kotuku Permit - Mosman Oil and Gas Limited Update
Following the successful sale of petroleum exploration permit 38526 over the Kotuku oil seeps on the West Coast (Permit) to Mosman Oil and Gas Limited (Mosman) prior to Christmas, we are pleased to provide an update on the Permit and Mosman.
Following the sale transaction, Aorere Resources has a 18% shareholding in Mosman and also holds a royalty for 2% of net sales revenue deriving from the Permit.
Mosman AIM Listing
Work on Mosman’s AIM listing is well advanced and it is expected that its listing will be completed in approximately 3 weeks’ time. In addition to the Permit Mosman also holds a 25% interest in an oil and gas permit application in Australia.
Competent Persons Report on the Permit
In connection with the AIM listing Mosman commissioned a competent persons report from Moyes and Co in respect of the Permit. A copy of the competent persons report accompanies this announcement.
Two key findings of the report are:
• The Permit has hydrocarbon potential in deeper structural and stratigraphic plays to the west and north of the Kotuku seeps where the hydrocarbon kitchens are mapped.
• The Permit has the necessary ingredients to suggest that accumulations of oil could be present, particularly at deeper levels. The project area is dominated by the Kotuku anticline and 22 leads and prospects have been mapped over the feature. The shallow nature of many of the structures mapped is favourable for cost effective drilling.
Page 28 of the report also sets out the “Prospective Resources” at the Permit. These suggest in terms of unrisked recoverable oil within four reservoirs at the Permit that there is a:
• 90% probability of 4.8 MSTB (million stock tank barrels)
• 50% probability of 15.6 MSTB.
• 10% probability of 59.2 MSTB.
Please note the above are estimates only and should be considered in the full context of the Competent Persons Report. In particular the above must be considered in the context of the definition of “Prospective Resources” in the report, being:
"Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development projects prepared."
The Board of Aorere is excited by the potential for the Permit and its investment in Mosman and will watch further developments arising from its 2014 work programme on the Permit with interest.
For and on behalf of the Board
Aorere Resources Limited