Quattro Closes Acquisition at Milo-Clarke Lake, North East British
Columbia, Completes Divestiture of Non-Core Assets at Noel, British
Columbia, and Signs a Binding Letter of Intent for the ...
Acquisition of Producing Properties at Donalda, Alberta
CALGARY, ALBERTA--(Marketwired - Mar 25, 2014) - Quattro
Exploration and Production Ltd. (TSX-VENTURE:QXP) ("Quattro" or the
"Company") is pleased to announce;
Milo-Clarke Lake,
British Columbia
On March 24th, 2014,
Quattro closed the acquisition of 100% of Progress Energy Canada,
Japex Montney Ltd. and Petroleum Brunei Montney Holdings Ltd's
interests, including all wells, facilities and lands as outlined in
the agreement as the Milo-Clarke Lake Region of British
Columbia.
The effective date
for the acquisition is February 1st, 2014, which increases
Quattro's production in the region by 900 mcf/d (net) bring
Quattro's production at Milo-Clarke Lake up to 1,850 mcf/d (net).
On closing, Quattro will become the Operator of Record for the
facilities and the associated wells while increasing its ownership
in the related facilities to 52%. The facilities are
well-maintained, with a designed capacity of 20,000 mcf/d of
compression, dehydration and treating. Quattro now holds a 48%
operating interest in the wells which in February of 2014 averaged
3,850 mcf/d. The wells are long life in nature and have produced to
date a total of 59.6 BCF of gas from the Slave/Pine Point formation
and are located within Quattro's current developed and undeveloped
land base. The purchase price was $750,000 plus G.S.T., and the
assumption of the associated decommissioning costs estimated to be
approximately $680,000 (net) less further post-closing adjustments
as would be normally associated with an acquisition of this nature,
for a total cost of $1,430,000 or $9,530 per flowing boe/d. The
acquisition was funded through the combination of cash on hand and
current cash-flow.
Noel, British
Columbia
Quattro would also
like to announce the sale of its 80% interest in exploration lands
located at Noel, BC to Nordic Oil and Gas Ltd. In connection with
the sale, Quattro acquires a 2.5% GORR on the lands and retains an
option to convert to a 25% net operating interest at the casing
point of the first well. The sale price was $300,000 paid by way of
the issuance of a securitized Promissory Note for $100,000, due on
or before December 2014, yielding 8% interest per annum and
4,000,000 units of Nordic ("Units"), each Unit consisting of one
(1) Class A common share of Nordic ("Nordic Shares") and 4,000,000
purchase warrants ("Nordic Warrants"). Each Nordic Warrant is
exercisable into one Nordic Share at a purchase price of $0.05 per
share prior to March 20th, 2016.
Donalda, Alberta
Quattro has also
executed a binding letter of intent for the acquisition from a
private Alberta based company of a combination of 1,000 mcf/d of
natural gas along with the associated gathering and compression and
spare equipment. The results will be, 1,000 mcf/d being added to
Quattro's Donalda facilities and a 600 mcf/day (net) increase in
production. The Company also acquired certain additional lands,
minerals rights and suspended wells along with the associated
undeveloped land. The effective date of the acquisition will be
February 1st, 2014.
The acquisition adds
additional flexibility and capacity to further increase production
through reactivations in the region with the goal of bringing
Quattro's Donalda production to greater than 3,000 mcf/d (net) in
the 3rd quarter of 2014. Upon closing the Company's developed land
base at Donalda will be 44,465 acres (net) developed and 27,810
acres (net) of undeveloped lands.
The purchase price
is $350,000 plus G.S.T., and the assumption of the associated
decommissioning costs estimated to be approximately $925,000 (net)
with further post-closing adjustments as would be normally
associated with an acquisition of this nature, for a total cost of
$1,275,000 or $12,750 per flowing boe/d, which also includes all
developed and undeveloped lands. The acquisition is being funded
through a combination of cash on hand and current cash-flow. The
transaction is scheduled to close on or before April 30th,
2014.
Leonard Van Betuw,
President and CEO commented, "As we announced in our February 25th,
2014 news release, these transactions are evidence of the execution
of Quattro's continuing business plan involving the consolidation
of its producing asset base and the consolidation of non-operating
interests within the Company's core areas, consisting of an
extensive network of processing facilities and pipeline gathering
systems. We have a very dedicated team at Quattro, and both the
Company and staff, are pleased with its progress in achieving its
ambitious goals. The Company continues to advance its remediation
plans and with the addition of this 1,500 mcf/d announced today we
are aggressively nearing our previously announced production and
asset targets as set out for the first half of 2014."
"The Company is now
the operator of record and has a greater than 65% ownership in 8
facilities. Quattro's operated facilities have a combined capacity
of 12,000 BOEPD (net). In Canada it continues to Quattro's plan to
continue to concentrate on being a diversified and efficient
operator of these facilities. The Company's efforts are increasing
both volumes and netbacks as we aggressively improve equipment
utilization through optimization and consolidation as shown with
the announcements made today. Quattro is pleased on how our
strategy of developing a diversified, low-risk material growth plan
in western Canada is advancing, while we continue our broader
commitment to simultaneously improving our corporate value both in
western Canada and Central America.", added Mr. Van Betuw.
About Quattro
Exploration and Production Ltd.
Quattro Exploration
and Production Ltd. ("QXP") continues to focus on the conventional
exploration and development of oil and natural gas reserves in
Western Canada, with an expanding presence in Alberta and British
Columbia. It's core low risk production base will provide the
Company the capacity to aggressively pursue a series of high impact
exploration and development efforts in Central and South America.
Quattro intends to balance this portfolio of activities to assure
its shareholders that it achieves material growth in both reserves
and production.
This release
includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements
of historical facts, that address future production, reserve
potential, exploration drilling, exploitation activities and events
or developments that the Company expects are forward-looking
statements. Although the Company believes the expectations
expressed in such forward looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward - looking statements. Factors
that could cause actual results to differ materially from those in
forward looking statements include market prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees
of future performance and those actual results or developments may
differ materially from those projected in the forward-looking
statements. For more information on the Company, Investors should
review the Company's registered filings which are available at
www.sedar.com.
This news
release shall not constitute an offer to sell or the solicitation
of any offer to buy, nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful. The securities offered have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent
registration or applicable exemption from the registration
requirements of the U.S. Securities Act and applicable state
securities laws.
BOE
presentation:
Barrel ("bbl")
of oil equivalent ("boe") amounts may be misleading particularly if
used in isolation. All boe conversions in this report are
calculated using a conversion of six thousand cubic feet of natural
gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on
an energy conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the well
head.
Trading in the
securities of Quattro Exploration and Production Ltd. should be
considered highly speculative. Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Quattro Exploration and Production Ltd.Leonard Van
BetuwPresident and Chief Executive OfficerOffice (403) 984-3917 or
Direct Line (587)
228-7070leonard@qxp-petro.comwww.qxp-petro.com
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