CALGARY, ALBERTA–(Marketwired – April 30, 2014) – Gear Energy Ltd. (“Gear” or the “Company”) (TSX:GXE) is pleased to announce today that it has closed the acquisition of certain heavy oil assets in our core areas as previously announced on April 24, 2014 for $85 million subject to post-closing adjustments.
The acquisition is consistent with Gear’s strategy of acquiring underexploited, geographically focused assets and provides a material increase in low risk future drilling opportunities and Gear’s team has already identified 175 net drilling locations on the assets, increasing Gear’s drilling inventory to approximately 400 locations. Gear has also identified approximately 60 net recompletion opportunities on existing vertical wells. Based on current 2014 drilling pace, Gear’s drilling inventory will now be greater than five years. Gear estimates total corporate production at closing of over 7,000 boe per day (97% oil weighted).
About Gear Energy Ltd.
Gear is a publically traded Canadian exploration and production company with predominantly horizontal heavy oil production in east central Alberta and west central Saskatchewan. The current and ongoing business plan is to continue focusing on being a low cost heavy oil operator, drilling economic wells and acquiring assets on an accretive basis.
Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward looking information includes, among other things, drilling inventory and locations, and the anticipated benefits of the acquisition. The words “future”, “may”, “could”, “targeted”, “should”, “would”, “suspect”, “outlook”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “target”, “potential” and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release describes the Company’s expectations as of the date of this news release.
The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward-looking information include, among others, risks arising from general economic conditions and adverse industry events, risks arising from operations generally, reliance on contractual rights such as licenses and leases in the conduct of its business, reliance on third parties, regulatory and royalty regime changes, tax and legislative changes, reliance on key personnel, operational difficulties or failures, unscheduled shut down of facilities, transportation or production, possible failure to achieve the benefits of the acquisition, possible failure of the business model or business plan or the inability to implement the business model or business plan as planned, competition, environmental matters, and insurance or lack thereof.
The Company cautions that the foregoing list of material factors is not exhaustive. Readers should carefully consider the foregoing factors and other uncertainties and potential events when considering an investment in the Company. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. Further risk factors that readers should consider are set forth in the Corporation’s Annual Information Form for the year ended December 31, 2013, which is available at www.sedar.com.
When used in this news release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe/d means a barrel of oil equivalent per day. Boe’s may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas 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 may be misleading as an indication of value.
The forward-looking information and statements contained in this news release speak only as of the date of this news release. The Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date.
Gear Energy Ltd.
Ingram B. Gillmore
President and Chief Executive Officer