Mumbai: Calgary, Canada-based Niko Resources, a 10% partner in Reliance Industries’ (RIL) D6 gas block in the Krishna-Godavari basin, has revised up the combined proved reserves of the field 3.7 times to 265 billion cubic feet equivalent (Bcfe) of natural gas from 70 bfce.
Proved plus probable reserves are estimated at 406 Bcfe, the company said in its earnings statement for the financial year ended 31 March.
Reserves are classified as proved (P1), probable (P2), or possible (P3) depending on their potential for being converted into actual production.
Proved reserves are considered to have a 90% certainty of being produced, probable to have a 50% certainty, and possible to have at least 10% certainty.
“...the company’s oil and gas reserves as at March 31, 2016, as evaluated by an independent reserves evaluator, reflect significant undeveloped proved and probable reserves for these fields,” Niko said.
In December 2014, Niko hired New York-based investment bank Jefferies LLC as financial adviser to restructure its business through a sale of assets and mergers. Failing to find a buyer, the company restructured its debt.
“The projected capital expenditures for the future development of these discoveries will likely require additional sources of funding, such as future equity or debt issuances. There is uncertainty whether the Company will be able to fund the development of undeveloped discoveries in the D6 Block,” Niko’s statement added.