CALGARY, July 24, 2019 /CNW/ - Cuda Oil and
Gas Inc. ("Cuda" or the "Company") (TSXV: CUDA) is
pleased to announce that it has entered into a series of binding
Asset Purchase Agreements (the "APAs") to sell
all of its oil and gas assets and related liabilities located in
the Province of Quebec
("Quebec") at a total
transaction value of CAD$10.59
million, including cash consideration at closing of CAD
$4.29 million, to arm's-length
purchasers (the "Transaction"). The Transaction is
anticipated to close on or about August 30,
2019.
Highlights:
- Cuda will dispose of all of its petroleum and natural gas
rights in Quebec (the
"Assets") which includes all land permits, licenses and
production rights and interests in the Province as well as all
tangible assets including drilling and related equipment associated
with the Assets;
- The purchasers will assume all environmental liabilities,
including abandonment and reclamation obligations, associated with
the Assets in Quebec, estimated by
the parties at CAD $3.2 million;
- The purchasers will pay CAD $4.29
million to Cuda in cash consideration; and
- The purchasers will cause Cuda to be released and
discharged, at closing, from a pending CAD $3.1 million claim associated with the exercise
of dissent rights in connection with the plan of arrangement of the
Company completed August 15,
2018.
This Transaction is subject to normal closing conditions
and regulatory approvals, including the approval by the TSX Venture
Exchange.
KES 7 Capital Inc. ("KES 7") acted as a financial
advisor to the Company. Pursuant to TSXV requirements, KES 7
has confirmed that it is an arm's-length party to Cuda and the
purchasers.
Glenn Dawson, President and
Chief Executive Officer of Cuda stated: "This is a significant
transaction for Cuda shareholders in its magnitude and strategic
creation of a pure play company in the Powder River Basin which has
been described as the 'Permian of the Rockies'.
"Moving forward, Cuda will focus on development of the
Company's high netback conventional light oil assets and Secondary
Recovery Miscible Gas Flood in Converse
County, Wyoming. Cuda's contiguous Powder River Basin lands contain multiple
defined opportunities to access and develop low risk proven
conventional reservoirs.
"Additionally, light oil charged unconventional reservoirs
within the Cretaceous Stack are highly prospective. Economic
horizontal drilling exploitation opportunities are being matured
across the Basin by major operators."
At year-end 2018, Cuda's independent reserves evaluator,
Ryder Scott, assigned significant
light oil reserves to the Company. The reserves evaluation was
prepared in accordance with the definitions, standards and
procedures contained in the COGE Handbook and NI 51-101 - Standards
of Disclosure for Oil and Gas Activities. Summary reserves
information for the Company's Proven Developed Producing
("PDP") and Proved Non Producing ("PNP"), Total
Proved ("1P"), and Proved plus Probable ("2P")
Reserves is provided below. No reserves were assigned to the
Assets and all of the reserves were assigned to the Company's
remaining Alberta and Wyoming assets.
Reserves at December 31,
2018:
- PDP + PNP is 1,534 mboe (62 % oil &
liquids)
- 1P is 4,949 mboe (84 % oil & liquids)
- 2P is 14,571 mboe (84% oil & liquids)
Reserve Value at December 31,
2018 (before tax discounted at 10%):
- PDP + PNP is $26.8
Million
- 1P is $77.8
Million
- 2P is $191.6
Million
About Cuda Oil and Gas Inc.
Cuda Oil and Gas Inc. is engaged in the business of
exploring for, developing and producing oil and natural gas, and
acquiring oil and natural gas properties across North
America. The Cuda management team has worked closely together
for over 20 years in both private and public company environments
and has an established track record of delivering strong
shareholder returns. Cuda will continue to implement its
proven strategy of exploring, acquiring, and exploiting with a
long-term focus on large, light oil resource- based assets across
North America including
significant operational experience in the United States. The
Cuda management team brings a full spectrum of geotechnical,
engineering, negotiating and financial experience to its investment
decisions.
Forward-Looking Information
This news release contains forward-looking information.
All statements other than statements of historical fact included in
this release are forward-looking statements that involve various
risks and uncertainties and are based on forecasts of future
operational or financial results, estimates of amounts not yet
determinable and assumptions of management. In particular, this
news release includes forward-looking information relating to the
Transaction, the impact of the Transaction on Cuda and its results
and development plans; regulatory and third party approvals
relating to the Transaction; anticipated Transaction consideration
and form thereof; the expected closing date of the Transaction; the
the anticipated discontinuance, release and discharge of the
dissent claim; the Company pro forma the Transaction; the estimated
environmental liabilities, including abandonment and reclamation
obligaitons; and the anticipated benefits of the Transaction; the
existence and performance of resource and reserve opportunities on
the Company's lands and related lands; and activity levels in the
Company's core areas. Risk factors that could prevent
forward-looking statements from being realized include market
conditions, third party and regulatory approvals, ongoing
permitting requirements, the actual results of current exploration
and development activities, operational risks, risks associated
with drilling and completions, uncertainty of geological and
technical data, conclusions of economic evaluations and changes in
project parameters as plans continue to be refined as well as
future oil and gas prices. Although Cuda has attempted to
identify important factors that could cause actual results to
differ materially, there may be other factors that cause results
not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements. The
Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
"BOEs" may be misleading, particularly if used in isolation. A
BOE conversion ratio of six thousand cubic feet of natural gas to
one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. As
the value ratio between natural gas and crude oil based on the
current prices of natural gas and crude oil is significantly
different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of
value.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
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SOURCE Cuda Oil and Gas Incorporated
