/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
KELOWNA, BC, June 19, 2015 /CNW/ - Georox Resources Inc.
("Georox" or the "Corporation")
(GXR:TSX-V; OF6A:FRA) wishes to announce an update on
activities.
General Corporate Matters
Georox estimates that for the 12 months ended April 30, 2015 average daily production was 185
boe/d and the average sale price was $69 per boe with a net back of $34 per boe. Gross oil sales for the 12 month
period ending April 30, 2015 were
approximately $4,663,824. Net
revenues for the same period were approximately $2,465,647. The Corporation has rights in
7,440 acres gross (5,980 net acres) and produces from 37 wells
gross (14 net wells).
The Corporation's proved plus probable (2P) as calculated by the
Corporation's reserve engineers, as of December 31, 2014 were 520,000 boe with a net
present value before tax and applying a 10% discount of
$10,600,000. Further reserve
information, including applicable assumptions, is contained in the
Corporation's press release dated February
25, 2015 and available on SEDAR. It should be noted
that reserve information is based on December 31, 2014 pricing
assumptions in use by the Corporation's reserve engineers and it is
not adjusted for activity on the Corporation's properties,
including depletion of reserves due to production.
The Corporation produces oil in three core areas in Alberta and Saskatchewan, which are Red Earth,
Pouce Coupe and Silverdale. Georox also owns several non-core
properties for future development at Meekwap, Swan Hills, Virginia
Hills and Couteau Lake.
Georox estimates that its current production is stable at
approximately 180 boe/d, comprised of 115 boe/d of light oil, 61
boe/d heavy oil and 4 boe/d of natural gas. Production
consists of 64% light oil & ngls, 34% heavy oil, and 2%
solution gas.
Red Earth, Alberta
In 2014 Georox acquired a 100% working interest in oil and gas
properties located in the Red Earth area, approximately 320 kms
northwest of Edmonton in northwest
Alberta. Production at Red Earth is presently
approximately 94 boe/d from 8 wells in the Granite Wash Q4Q Pool
formation. Management is reviewing and assessing the Red Earth
properties to identify if opportunities to enhance production exist
before initiating new operations. During July 2014 Georox completed a geological study to
identify growth opportunities at Red Earth. The study
identified two potential vertical locations to drill in the Granite
Wash formation and one horizontal location to drill in the Slave
Point formation. Further information on Red Earth is
contained in the Corporation's July 15,
2014 press release.
The table below indicates the potential beyond primary recovery
through the implementation of water flood/pressure support to
significantly extend the life and recoverable reserves from the Red
Earth properties.
Red Earth Reserves Volumetric Summary (from
geological and 3D seismic mapping)
OOIP
(MBOE)
|
Primary Rec.
(26%)
(MBOE)
|
Secondary Rec.
(8%)
(MBOE)
|
ROIP
(MBOE)
|
Cumm (8
Wells)
(MBOE)
|
Remaining
(MBOE)
|
3100
|
806
|
248
|
1054
|
579
|
475
|
Georox's production is gathered and pipelined about 1.5 miles to
a Penn West Petroleum treating facility. Penn West is a major
operator in the area adjacent to Georox's producing properties.
Pouce Coupe, Alberta
In 2013 Georox acquired oil and gas interests located in the
Pouce Coupe area, northwest
Alberta. The Corporation has a 52%
working interest in this property. Georox Resources Inc. (two
wells) and Birchcliff Energy Ltd. (one well) are the operators of
the three producing wells. Production from the three wells consist
of approximately 13 barrels of light oil and 25,000 cubic feet of
solution natural gas per day (aggregate 17 boe/d net to the
Corporation).
Georox is reviewing and assessing the Pouce Coupe property to identify opportunities
to enhance production. There is potential to drill two additional
development wells on its lands in this area.
Silverdale (GP Channel and
Sparky Project), Saskatchewan
In 2009 the Corporation earned a 6.9% working interest in the GP
formation of the Silverdale oil
property, where 9 wells were drilled and put on production (8 HZ
wells and 1 vertical well). Husky Oil is the operator. In addition
Georox earned a 15% working interest in the Sparky oil property (8
vertical wells) located in northwest Saskatchewan near Lloydminster. Georox's current net production
from this property is approximately 61 boe/d. The Corporation
expects that the GP Channel project will be followed up with
further horizontal drilling.
Coteau Lake, Saskatchewan
In 2012 Georox participated in the drilling of one horizontal
well in the Coteau Lake area in southeastern Saskatchewan earning a 31.875% working
interest before payout and 21.25% after payout. Production
from this well is currently 9 boe/d (based on a before payout
status) net to Georox from the Ratcliffe formation.
Go Forward Plans
Due to the low oil prices, resource based energy companies have
experienced a significant reduction in net present values of their
oil and gas reserves as well as reduction of costs for field
operations. Management believes that oil prices may have
reached its lowest price level and that there are unique
opportunities to acquire discounted assets in the immediate future.
Georox is currently reviewing acquisition possibilities in prolific
oil producing areas in Western
Canada to bolster its assets.
About Georox
The Corporation is a Canadian oil and gas exploration and
production company engaged in the acquisition, exploration and
development of oil and gas in western Canada.
Production volumes are commonly expressed on a barrel of oil
equivalent ("BOE") basis whereby natural gas volumes are converted
at a ratio of six thousand cubic feet to one barrel of oil.
The intention is to convert oil and natural gas measurement units
into one basis for improved analysis of results and comparisons
with other industry participants. The term BOE may be
misleading, particularly if used in isolation. The conversion
ratio is based on an energy equivalent method and does not
represent an economic value equivalency at the wellhead.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements relating
to the future operations of the Corporation and other statements
that are not historical facts. Forward-looking statements are often
identified by terms such as "will", "may", "should", "anticipate",
"expects" and similar expressions. All statements other than
statements of historical fact, included in this release, including,
without limitation, statements regarding future plans and
objectives of the Corporation, are forward looking statements that
involve risks and uncertainties. There can be no assurance
that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in
such statements.
Although Georox believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Georox can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures.
The reader is cautioned that assumptions used in the preparation
of any forward-looking information may prove to be incorrect.
Events or circumstances may cause actual results to differ
materially from those predicted, as a result of numerous known and
unknown risks, uncertainties, and other factors, many of which are
beyond the control of Georox. As a result, we cannot
guarantee that any forward-looking statement will materialize and
the reader is cautioned not to place undue reliance on any
forward-looking information. Such information, although
considered reasonable by management at the time of preparation, may
prove to be incorrect and actual results may differ materially from
those anticipated. Forward-looking statements contained in
this news release are expressly qualified by this cautionary
statement. The forward-looking statements contained in this
news release are made as of the date of this news release, and
Georox does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a
result of new information, future events or otherwise, except as
expressly required by Canadian securities law.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the Units in the United States. The Units (or constituent
securities) have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Georox Resources Inc.