CALGARY, ALBERTA–(Marketwired – Dec. 17, 2014) – Leucrotta Exploration Inc. (“Leucrotta”) (TSX VENTURE:LXE) is pleased to announce that it has added 6,400 acres (10 sections) of Montney lands contiguous to its current landholdings in the greater Dawson area of Northeast British Columbia for $6.6 million. Including the new lands, Leucrotta now has over 170 net sections of Montney prospective lands in the area.
During Q4 2014, Leucrotta drilled one Montney horizontal well (8-18) and is currently drilling the horizontal section of a second well (13-07). These are significant step-outs from Leucrotta’s original Lower Montney well (B4-19) that has been producing for over 7 months.
The 8-18 well was drilled horizontally without logging or coring the vertical section due to time constraints pertaining to an area land sale. Certain mechanical issues were encountered during the testing phase; however, at the end of the test period, the well was flowing up casing at a rate of approximately 375 boepd (20% condensate) plus approximately 400 bbls/day of frac fluid. The well is now shut-in to gather pressure data and will be retested at some point to help further evaluate its potential. The well has established liquids-rich gas deliverability in the area and additional data will be acquired from the well to help evaluate the overall Montney project.
The 13-07 well was drilled vertically and cored before the decision was made to kick off the well horizontally. In the vertical section, the well encountered approximately 50 metres of net pay and better than expected porosity. The drilling of the horizontal section of the well should be finished prior to Christmas and is scheduled to be completed in mid-January. Testing and evaluation of the well is expected to be released in late January or early February.
Leucrotta’s first horizontal multi-frac well into the Lower Montney (B4-19) has been producing for over 7 months and is still producing at a rate of over 800 boepd (23% liquids).
Leucrotta has started fabricating the components for the gas plant expansion scheduled to be on-stream in late 2015. Capital spent in Q4 2014 (including approximately $11 million to be accrued for gas plant) is estimated at $37 million. We estimate a positive working capital balance of $23.5 million (no debt) at the end of 2014 and an undrawn bank credit facility of $25 million. Leucrotta’s 2015 budget will not be released until February 2015, however, we anticipate taking a conservative but flexible approach given the commodity and business environment. Initiatives for 2015 will include looking at opportunities to unlock capital invested in the gas plant and on furthering the Montney project in the greater Dawson area.
Leucrotta’s current production is approximately 2,700 boepd (18% liquids).
The Company uses the following frequently recurring industry terms in this press release: “bbls” refers to barrels and “boe” refers to barrel of oil equivalent. Disclosure provided herein in respect of a boe may be misleading, particularly if used in isolation. A boe conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent has been used for the calculation of boe amounts in the press release. This boe conversion rate is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “intends”, “forecast”, “plans”, “guidance” and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this press release contains forward looking statements and information relating to the Company’s oil, NGLs, and natural gas production, capital programs, oil, NGLs, and natural gas commodity prices, and working capital. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities, and the availability and cost of labour and services.
Although Leucrotta believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as 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 estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with Leucrotta’s expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. Leucrotta undertakes no obligation 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.
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.
Leucrotta Exploration Inc.
Mr. Robert J. Zakresky
President and Chief Executive Officer
Leucrotta Exploration Inc.
Mr. Nolan Chicoine
Vice President, Finance and Chief Financial Officer
Leucrotta Exploration Inc.
Suite 700, 639 – 5th Avenue SW
Calgary, Alberta T2P 0M9
Phone: (403) 705-4545
(403) 705-4526 (FAX)