CALGARY, Alberta, Jan. 20, 2016 (GLOBE NEWSWIRE) — Quattro Exploration And Production Ltd. (TSX-V:QXP) (“Quattro” or the “Company“) is pleased to announce the purchase of a 100% interest in oil and gas production, facilities and lands in west central Saskatchewan from an Alberta-based oil and gas exploration and production company (the “Acquisition”).
The purchase price for the acquisition was $4,150,000, to be paid through the issuance of 35,000 non-voting, Class C, series 3 preferred shares at a deemed price of $100 per share (“Preferred Shares”) and $650,000 in restricted cash, held on deposit, anticipated to be remitted to the vendor before January 31, 2016. The properties are located in the region of Superb, Saskatchewan, where production averaged 160 bbls per day in 2015 (the “Properties”).
Based on the vendor’s independent 2014 year end reserve report, current pricing, and the execution of a modest capital budget, current proven reserves are 340,000, while proven and probable reserves are estimated to be approximately 540,000 bbls of oil.
All conditions of closing of the purchase of the Properties are anticipated to be completed on or before January 31st, 2016, with the Acquisition having an effective date of December 31, 2015, and is subject to a number of customary conditions including, but not limited to, completion of due diligence and approval of the TSX Venture Exchange.
The Preferred Shares are priced at $100 per share and pay an annual preferred dividend of $3.50 per share. The holder will have the right on the anniversary of the 2nd year of issuance to convert the Preferred Shares into Class A common shares at a ratio of 40 Class A shares for each Preferred Share converted, valuing Quattro’s Class A common shares upon conversion at a deemed price $2.50 per share.
“Upon the closing of this acquisition of oil production, at a discount to current oil and natural gas pricing, the additional prospective lands, and the extensive operated facilities in west central Saskatchewan positions Quattro with the potential to collectively reach its initial target of 1,000 boe/d from its combination of exploratory and producing properties in Saskatchewan,” said Leonard Van Betuw, President and CEO.
Summary of the Acquisition
|Annual Production:||160 bbls. per day with extensive operated facilities, $25,935 per bbl/d on a PDP basis|
|Reserves:||540,000 bbls of estimated reserves, based on a proven plus probable basis**|
|Facilities:||Current and maintained, with excess capacity.|
|Land:||14,275 acres; 965 developed and 13,310 undeveloped, valued at $563,675.|
|Additional Potential:||(i) optimization, (ii) work-overs and (iii) seismically defined, undeveloped potential|
**2P reserves are estimates based on the review of 3rd party engineering provided by the seller, and internally verified by Quattro during its due diligence process.
About Quattro Exploration and Production Ltd.
Quattro Exploration and Production Ltd. (“QXP”) continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada. Our diversified core areas target a low risk production base focused on providing the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Canada and Central America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.