WINNIPEG, MB and CALGARY, ALBERTA. (NOVEMBER 22, 2013) – Donald Benson, President and CEO of Nordic Oil and Gas Ltd. (“Nordic”), (TSXV: NOG), and Leonard Van Betuw, President and CEO of Quattro Exploration And Production Ltd. (“Quattro”), (TSXV: QXP), are pleased to announce that the companies have entered into an agreement which will see Nordic acquire an 80% interest in 1,179 hectares of land from Quattro in the Noel area of B.C., northwest of Tumbler Ridge, adjacent to the Alberta border (the “Acquisition Agreement”).
The lands are historically prospective for gas from the Paddy-Cadotte-Harmon Members of the Peace River Formation. “However”, Mr. Benson stated, “we have identified two prospective Cardium zones from the logs from the existing wells, and we will be investigating the viability of either re-completing the existing wells or alternatively drilling a twinned well on the existing surface lease.”
When added to the existing property at Noel, this acquisition will give Nordic 20 drilling locations and the proximity between the two properties lends to strong efficiencies.
“On September 12, 2013, Nordic entered into a farm-in agreement on one section of Petroleum and Natural Gas leases in the area, and this new acquisition will now more than quadruple Nordic’s land position in the region”, added Mr. Benson.
Quattro sees this as part of its deliberate plan to focus on the core of its recent acquisition through the monetization of undervalued infrastructure and lands.
“Nordic’s focus on this region provides Quattro an exciting opportunity to participate on a highly prospective project that was part of our recent acquisition in British Columbia,” said Mr. Van Betuw.
“The main attraction of the Noel property and reason Nordic entered into the Acquisition Agreement securing this new property”, said Mr. Benson, “was that both locations are already tied-in to the pipeline, therefore eliminating the cost of infrastructure. There are two identified shallow Cardium zones, which occur at a depth of 750 to 950 meters subsurface, which are considered shallow wells, at a similar depth to those that we have drilled at Joffre, Alberta.”
There is also a much deeper Cadotte zone that is very prolific throughout the area. Cadotte wells have typically produced at an average rate of more than 1,600 Mcf/d over the first two years. These wells, at a depth of approximately 2,500 metres, are substantially more expensive to drill and the Company would require seismic before committing to drilling a Cadotte well.
“We have to evaluate whether the existing well can be recompleted in the Cardium zone or will have to be re-drilled,” Mr. Benson went on to say. “Hopefully it can be recompleted, as this will cost much less than a re-drill.”
The acquisition price of $300,000 will be satisfied via a cash and Nordic stock. The purchase price will be payable in the form of 4,000,000 shares of Nordic Oil and Gas Ltd to be issued from treasury at a price of $0.05, and the balance of $100,000 in cash. The Closing date shall be December 20, 2013, unless otherwise agreed to by both parties.
In addition to the purchase price, Quattro is extended a GORR of 2.5% on all production from the purchased property. It is agreed that Quattro can convert the royalty to a 25% working interest on or before March 31, 2014 or as extended by Nordic by paying 25% of the costs incurred to test or drill the well.
Mr. Benson noted that Nordic will be undertaking a new Private Placement Flow-Through Offering to raise the funds required to complete the transaction.
The acquisition is subject to approval by the TSX Venture Exchange.
The Cardium formation has been one of the most prolific oil and gas plays in Western Canada over the last few years. We believe the Noel, BC area is an extension of the Cardium development to the east in Alberta for the development of liquids rich Cardium natural gas. The logs from the existing well on the location and extensive mapping of the area indicate the presence of rich natural gas with associated condensate.
In a Prospect Synopsis Report prepared by a leading petroleum engineering company, it is estimated that the wells will produce between 40 and 90 barrels of condensate in conjunction with every 1 million cubic feet of gas produced.
About Nordic Oil and Gas Ltd.
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the exploration and development of oil, natural gas and Coal Bed Methane in Alberta and Saskatchewan. The Corporation is listed on the TSX Venture Exchange and trades under the symbol NOG. Nordic was one of the “2008 TSX Venture 50” companies, a ranking of the top 10 public venture capital companies in five industry sectors listed on the TSX Venture Exchange.
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, primarily in south central Saskatchewan, with an expanding presence in Alberta. Our core low risk production base will provide us the capacity to aggressively pursue of a series of high impact exploration and development efforts in Central and South America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.
This news release contains certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical fact, that address events or developments that either of Quattro or Nordic (the “Companies”) expect to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although the Companies believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration and drilling success, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Companies’ respective management on the date the statements are made. The Companies undertake no obligation to update these forward-looking statements in the event that respective management’s beliefs, estimates or opinions, or other factors, should change.
* The term BOEs may be misleading, particularly if used in isolation. A BOES conversion ratio of 6 Mcf: 1 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.
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 the contents of this News Release.
For additional information, contact:
Don Bain, Corporate Secretary.
Nordic Oil and Gas Ltd.
Follow us on Twitter – thousands do! : www.twitter.com/Nordic_Oil