CALGARY, ALBERTA–(Marketwired – Dec. 14, 2015) – Striker Exploration Corp. (“Striker” or the “Company”) (TSX VENTURE:SKX) is pleased to announce an operational update and the entering into of a definitive agreement for the disposition of certain non-core assets for cash consideration of $5.2 million (“the Disposition”). Upon completion of the Disposition, Striker estimates that it will exit 2015 with a net debt of $8.0 million, or approximately 0.6 times debt to trailing cash flow.
At Wilson Creek, Striker continues to deliver positive drilling results through its focused Belly River growth strategy while maintaining financial discipline. During the fourth quarter, the Company drilled and cased six gross (2.9 net) Belly River horizontal light oil wells. Included in this program are four gross (2.67 net) development wells of which three have been placed on production. The following table contains data from field reports for the three wells:
|Calendar Daily Average Production – Gross/Raw|
|Working Interest||Days On Production||Light Oil(1)||Natural Gas(2)|
|Belly River Channel #1||76||%||12||182||901|
|Basal Belly River #2||24||%||29||157||159|
|Basal Belly River #1||67||%||39||87||87|
|1.||Field-measured crude oil quality of 40°API|
|2.||Natural gas volumes currently being flared or incinerated prior to tie-in|
The Company is encouraged with initial production data which validates the Wilson Creek geological model as well as providing strong well results that, on average, provide a greater than 30% rate of return at US$45 WTI.
The fourth development well targeted an additional independent Belly River channel zone. Completion is expected to be performed in early 2016.
The two exploration wells, which Striker has farmed out, have been drilled, cased and are scheduled to be completed in mid-December 2015 and on production in the first quarter of 2016. See Striker’s press release dated November 26, 2015 for further details on the farm-out.
DISPOSITION OF NON-CORE ASSETS FOR $5.2 MILLION
The Disposition consists of non-strategic gross overriding royalties in its Killam area of east central Alberta which the Company has agreed to sell to an arm’s length party for total cash consideration of $5.2 million. The Disposition will be effective October 1, 2015, and is expected to close on or before December 18, 2015. The assets being sold represent the entirety of Striker’s gross overriding royalty holdings.
Highlights of the Disposition:
- Total cash consideration of $5.2 million, before customary closing adjustments;
- Net royalty interest production from the Disposition averaged 48 boepd, consisting of 44 bbl/d of medium gravity oil production and 25 mcf/d of natural gas for the month of September 2015; and
- Cash flow generated by the assets in September 2015 was $45,800.
The cash consideration to be realized from the Disposition is highly accretive to Striker’s current valuation and equates to an annualized cash flow multiple of 9.5 times and $108,000/boepd based on September 2015 cash flow and production.
Upon completion of the Disposition, Striker will only be drawn to 20% of its available credit facility. With an exceptionally strong financial position, the Company is well funded into 2016 to continue to create shareholder value through the development of its Belly River assets.
Striker’s annual average production guidance of 2,650 boepd for 2015 remains unchanged.