CALGARY, May 1, 2019 /CNW/ - Pulse Oil Corp. ("Pulse" or
the "Company") (TSX-V: PUL and PUL.WT) is pleased to report the
Company's consolidated financial statements for the year ended
December 31, 2018 ("FY 2018") and
accompanying management's discussion and analysis are now filed and
available for viewing under the Company's profile at www.sedar.com.
Pulse's first full year as a public company resulted in significant
growth in all measured corporate financial metrics, including its
2018 year-end reserves as evaluated by McDaniel and Associates Ltd.
("McDaniel"). Below are highlights of FY 2018, Pulse encourages
readers to access full versions of the filings at
www.sedar.com.
2018 Financial Highlights:
- Pulse increased its revenue by 378% to $2,670,743.
- Cash flow from operations increased to $1,908,860 for FY 2018 compared to negative cash
flow from operations of $877,504 last
year.
- On November 20, 2018, Pulse
concurrently closed a best-efforts public offering and a private
placement for total gross proceeds of $11,300,520.
- Pulse ended FY 2018 with $10,286,827 in cash and $7,034,526 in working capital compared to
$859,656 in cash and $715,786 in working capital last year.
- The company recorded net income for the year of $46,172 compared to a net loss of $1,211,932 last year.
2018 Operating Highlights:
- Increased proved ("1p") reserve value by 40% and 2p by 37% when
compared to FY 2017. Reserve estimates, with an effective date of
December 31, 2018, on Pulse's
interests within the Bigoray and Queenstown operating areas were assessed by
McDaniel, a qualified independent reserves evaluator, in accordance
with National Instrument 51-101 and the Canadian Oil and Gas
Evaluation Handbook (the "Assessments"). The Assessments
resulted in a pre-tax net present value of future net revenue of
$33.4 million of proved plus probable
("2p") reserves and $21.5 million of
1p reserves, using a 10% discount rate to Pulse's net working
interest. The estimated value does not represent fair market
value.
- Phase 1 and 2 of the contracted Schlumberger Enhanced Oil
Recovery study were completed in 2018; Phase 3 was completed in
January 2019 leading to encouraging
results as previously announced by Pulse.
- Throughout FY 2018, Pulse added production through
reactivations at Bigoray, acquired certain wells from arms-length
third parties and the Alberta Energy Regulator, negotiated surface
access agreements and completed a geotechnical evaluation of 3-D
seismic data that optimized the Queenstown asset and led to the drilling of
Pulse's first two Queenstown oil
wells.
- In December 2018, Pulse drilled
two light oil wells in Pulse's Queenstown asset followed by completion and
initiation of permanent production in early 2019. As of the date of
this release, the two wells continue to flow back a combination of
load water associated with fracture treatments and sweet, light
crude oil with oil cuts steadily increasing on a daily basis. It is
expected to take a further 3-4 weeks for the wells to reach maximum
oil rates, at which time the Company will report results.
- Planned for the drilling of two new Bigoray oil wells in Q1 of
2019. Both wells are being completed and production testing is
expected to begin in May 2019.
Pulse is also pleased to report its second Bigoray well has
successfully reached total depth of 2705MD into the Nisku E pool.
Results of this second well are encouraging with oil shows similar
to the Nisku D pool well previously announced on April 23, 2019. Both wells have successfully
defined undrained attic areas of the pinnacle reef pools and are
now awaiting improved spring break-up weather conditions to
initiate testing operations. Existing infrastructure will
facilitate commencement of full-time production in Q2 of the 2019
fiscal year.
Garth Johnson, Pulse CEO,
commented, "A busy year was had by everyone at Pulse, despite the
challenging times producers faced in the Canadian oil and gas
industry. Low oil prices, large differentials affecting oil sales
prices and a year of political gamesmanship between many of the
provinces of Canada fuelled these
challenges. At Pulse, we embrace the discussion as it relates to
the environment and the effort to make changes while also
understanding the need for oil and gas in the coming years until a
viable, cost-effective alternative is available around the world.
This was our first full year as a publically traded company and we
are happy to have achieved significant growth in revenue, cash flow
from our operations, reserves and in net income. At the same time
we accessed equity markets in a very difficult time and put that
money to work. We have already drilled two wells at Queenstown that are now on permanent
production via our recently installed facilities and pipelines. We
also planned to advance our Bigoray EOR program and in Q1 2019
completed a Bigoray two well drilling program. We forecast solid
results from both these programs that will enable us to advance our
2019 operations. As oil prices have strengthened, differentials
have returned to normal levels, and a new government has been
elected in Alberta, our timing to
add production is lining up well and we look forward to working
toward more success in the coming years. We thank those that have
supported us this far."
About Pulse Oil Corp.
Pulse is a debt-free, Canadian company incorporated under the
Business Corporations Act (Alberta) that is focused on methodically,
safely, yet aggressively making progress to increase production and
reserves in the Queenstown and
Bigoray acreages it holds 100% interests in. In addition, Pulse is
advancing its Bigoray EOR program and new drilling efforts in
Queenstown. Pulse owns 100%
interests in the Bigoray area of Alberta, which includes two Nisku oil pinnacle reefs, as well as 100%
interests in producing assets in the Queenstown area of southern Alberta. Pulse is moving forward to grow
production and execute an EOR project to unlock significant value
for shareholders through control of approximately 65 net sections
of land across the Mannville,
Cardium, Pekisko/Shunda, Nisku and
Duvernay Shale trends in Western Canada. Pulse will also
continue to focus on potentially acquiring affordable, small to
medium sized proven oil and gas assets with significant upside. The
Company plans to achieve further growth through low-risk,
technically diligent drilling within its Queenstown assets, infrastructure ownership
and reserve growth utilizing proven EOR techniques and
implementation of technology.
Neither the TSX Venture Exchange, Inc. nor its Regulation
Service Provider (as that term is defined under the policies of the
TSX Venture Exchange) has neither approved nor disapproved of the
contents of this press release.
READER ADVISORY
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The words "believe," "expect," "anticipate,"
"plan," "intend," "foresee," "should," "would," "could",
"potentially" or other similar expressions are intended to identify
forward-looking statements, which are generally not historical in
nature. Such statements include, without limitation,
statements pertaining to the Bigoray and Queenstown operations currently underway,
including drilling plans and results, production testing,
anticipated oil pay, well completion, anticipated future
production, and facilities related to the assets of Pulse Oil. In
addition such statements also include without limitation,
statements pertaining to the expected Bigoray EOR project and
its planned development.
The forward-looking statements are based on management's current
expectations and beliefs concerning future developments and their
potential effect on the Company based on information currently
available to management. While management believes that these
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting Pulse will
be those anticipated. Forward-looking information involves known
and unknown risks, uncertainties, assumptions and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information. Important
factors that could cause actual results to differ materially from
those in the forward looking statements include, but are not
limited to: drilling results that deviate from management's current
expectations; delays in the Company's drilling activities and
tie-in of infrastructure; the volatility of commodity prices,
product supply and demand, competition, access to and cost of
capital, the assumptions underlying production forecast, the
quality of technical data; environmental and weather risks,
including the possible impacts of climate change, the ability to
obtain environmental and other permits and the timing thereto,
government regulation or action, the costs, timing and results of
drilling operations; the availability of equipment, services,
resources and personnel required to complete the Company's planned
operating activities; access to and availability of transportation,
processing and refining facilities, acts of war or terrorism; and
general economic conditions and other financial, operational and
legal risks and uncertainties. The forward-looking statements
contained in this press release are made as of the date hereof and
the Company undertakes no obligations to update publicly or revise
any forward-looking statements or information, whether as a result
of new information, future events or otherwise, unless so required
by applicable securities laws.
Barrels of oil equivalent (boe) is calculated using the
conversion factor of 6 mcf (thousand cubic feet) of natural gas
being equivalent to one barrel of oil. Boes may be misleading,
particularly if used in isolation. A boe conversion ratio of 6
mcf:1 bbl (barrel) is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. Given that the
value ratio based on the current price of crude oil as compared to
natural gas is significantly different from the energy equivalency
of 6:1, utilizing a conversion on a 6:1 basis
Reserves
All production and reserves quantities included in Pulse's
public filings have been prepared in accordance with Canadian
practices and specifically in accordance with National Instrument
51-101 Standards of Disclosure for Oil and Gas Activities. These
practices are different from the practices used to report
production and to estimate reserves in reports and other materials
filed with the SEC by United
States companies. Accordingly, information concerning
resources, deposits, production, reserves and any similar
information of the Company may not be comparable with information
made public by companies that report in accordance with
United States standards.
NPV10's use forecast pricing and costs based on the opinion of
the independent reserve evaluator of the future crude oil, natural
gas and natural gas product prices on the effective date of the
reserve evaluation and escalate annually at a rate of 2% per year,
in Canadian dollars. The forecast of commodity prices can be found
at http://www.mcdan.com/priceforecast.
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SOURCE Pulse Oil Corp.
