Alta Mesa Holdings Announces Year-End Proved Reserves

HOUSTON, Feb. 27, 2012 (GLOBE NEWSWIRE) -- Alta Mesa Holdings, LP announced today its total estimated proved oil and natural gas reserves as of December 31, 2011, were 348 billion cubic feet equivalent, consisting of 22 million barrels of crude oil, condensate and natural gas liquids and 217 billion cubic feet of natural gas. Reserves were 38% oil and natural gas liquids and 72% proved developed.

Highlights for 2011 include:

• PV-10 value of proved reserves increased to $1.1 billion, up by $365 million or 52%
• Total Proved oil and liquids volume increased by 56%  
• Proved Developed Producing reserve volume increased by 26%
• As a % of Proved Developed Producing volume, oil and liquids increased to 37% from 23%
• Proved Developed reserve volume increased by 18%
• Total Proved reserves replacement was 155%, a net increase of 23 Bcfe
• In the Eagle Ford Shale, proved reserves (90% oil) increased by 547%
• In Oklahoma, proved reserves (74% oil) increased by 37%
• Annual production for 2011 totaled 42 Bcfe or 114 MMcfe per day, an increase of 22% versus 35 Bcfe, or 95 MMcfe per day in 2010
• Production in the fourth quarter of 2011 averaged 110 MMcfe per day (71% gas)
• The reserve life index increased to 8.7 years from 8.1 years on a proved reserves basis

"We had a very good year in 2011 and I am excited about the year ahead" stated Alta Mesa's Chief Executive Officer, Hal Chappelle, "We have a high-quality team of engineers, operating personnel, geoscientists, and professional support who both manage the impactful assets in our core operating areas and have created opportunities for oil and liquids-rich gas development. We have good line-of-sight growth in reserves and production, and a strong balance sheet that gives us solid financial flexibility. In 2011 we demonstrated our ability to direct capital into oil and liquids-rich gas within our organic portfolio, and we have structured our development plan, balance sheet and hedges to maximize profitability in 2012. Importantly, we have a very good balance of both resource-derived and conventional oil and gas production opportunities that we plan to deploy over $220 million to develop. Finally, we continue to actively manage our price risk to help ensure certainty of cash flow, with a 2012 hedge portfolio that includes 58 MMcfd and 4,500 Bopd hedged at an average floor price of $4.68 and $99.53, respectively."

Alta Mesa's reserves at year-end 2011 and 2010 are summarized below.  

Based upon Securities and Exchange Commission ("SEC") reserves regulations, Alta Mesa's proved reserves at December 31, 2011, were computed using first-day-of-the-month 12-month average 2011 commodity prices of $96.19 per barrel ("Bbl") of oil (based on NYMEX prices) and a Henry Hub cash price of $4.16 per million British thermal unit ("MMBtu") of natural gas, with necessary adjustments applied to each field to arrive at the net prices received by the Company. Alta Mesa's net average prices contained in the reserve report were approximately $99.55 per Bbl of oil and $4.07 per thousand cubic feet ("Mcf") of natural gas. Using these prices, the estimated discounted net present value of Alta Mesa's proved reserves, before projected income taxes, using a 10% per annum discount rate was $1.1 billion at December 31, 2011. Alta Mesa's proved reserves at December 31, 2010 were computed using net average prices of $74.36 per Bbl of oil and $4.29 per Mcf of natural gas. PV-10 is a non-GAAP measure and is different than the Standardized Measure of Discounted Future Net Cash Flows ("Standardized Measure", which will be presented in Alta Mesa's upcoming Form 10-K) in that PV-10 is a pre-tax number, while the Standardized Measure includes the effect of estimated future income taxes.

Alta Mesa Holdings, LP is a privately held company engaged in onshore oil and natural gas acquisition, exploitation, exploration and production whose focus is to maximize the profitability of our assets in a safe and environmentally sound manner. We seek to maintain a portfolio of lower risk properties in plays where we identify a large inventory of drilling, development, and enhanced recovery and exploitation opportunities in known resources. We maximize the profitability of our assets by focusing on advanced engineering analytics, enhanced geological techniques including 3-D seismic analysis, and proven drilling, stimulation, completion, and production methods. Alta Mesa Holdings, LP is headquartered in Houston, Texas.

Safe Harbor Statement and Disclaimer

This material includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. You should not place undue reliance on forward-looking statements. They are subject to known and unknown risks, uncertainties and other factors that may affect the company's operations, markets, products, services and prices and cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements may include statements about our: business strategy; reserves, including changes to our reserves presentation in accordance with newly adopted SEC rules; financial strategy, liquidity and capital required for our development program; realized natural gas and oil prices; timing and amount of future production of natural gas and oil; hedging strategy and results; future drilling plans; competition and government regulations; marketing of natural gas and oil; leasehold or business acquisitions; costs of developing our properties and conducting our gathering and other midstream operations; general economic conditions; credit markets; liquidity and access to capital; uncertainty regarding our future operating results; and plans, objectives, expectations and intentions that are not historical. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of natural gas and oil. These risks include, but are not limited to: commodity price volatility; inflation; lack of availability of drilling and production equipment and services; environmental risks; drilling and other operating risks; regulatory changes; the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, cash flow and access to capital; the timing of development expenditures; and other risks. Except as otherwise required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The SEC has generally permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use the terms "estimated ultimate recovery," "EUR," "probable," "possible," and "non-proven" reserves, reserve "potential" or "upside" or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines may prohibit us from including in any future filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company.