DEJ: Year-end reserve assessment multiplies U.S. volumes

Dejour Enterprises (DEJ) on March 16, 2010 released results from Gustavson Associates, independent petroleum engineering consultants (Boulder, Colorado). Gustavson has credited the company (as of December 31, 2009) with 91 billion cubic feet (natural gas equivalent) of proved undeveloped reserves (net to Dejour) on the company’s key Gibson Gulch acreage in the Piceance Basin of Colorado.

These estimates were prepared in accordance with Canada’s National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. US disclosure standards, revised recently by the SEC, are now more conservative than Canadian standards; however, these estimates, done by a US firm on US properties and affirming reserve quantities far in excess of the estimates we used in our 2009 report initiating coverage, have a disproportionate impact on the valuation of the company.

On a preliminary basis, and pending the release of SEC figures later this month, our earnings and cash-flow model is now showing a per-share valuation for the company ranging between USD 1.22 and USD 1.67. We will provide an update report once SEC figures and DEJ fiscal year-end financial statements are released.

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