Pilot Energy Corp. has duly executed an offer to purchase (the “OTP” or letter of intent) with the Vendor of certain oil and gas assets comprising 2,320 gross acres (1,838 net acres) in the Swift Current corridor as previously defined in Pilot’s Corporate presentations. The assets comprise of 20 barrels of oil per day (gross/net) currently producing, plus 90 barrels per day (net) of suspended oil that can be re-activated immediately from six (6) gross (4.1 net) wells. The working interest in the two properties ranges from 66.5 to 100 percent and includes all processing, treating, tank storage (over 1000 barrels of inventory) and water re-injection facilities. Proved and proved plus probable reserves consecutively are estimated at 283,000 and 837,400 barrels of oil (net W.I.). Only 8 of the potential 16 horizontal well locations on the asset’s mineral land base have been forecast and included in the above reserve estimates.
The assets contain prolific upper and lower Shaunavon oil production, cited by CIBC’s January 2014 Resource Play Watch(1) as the second highest netback tight oil play in North America at $58/bbl of oil break-even price. Drilling prospects on the assets have been de-risked by geological mapping and analog core analysis. Sixteen (16) gross (11 net) horizontal drilling locations with the potential for an incremental 2,000 gross (1,400 bbl/d net) barrels of oil per day are forecast based on recent adjacent activity and drilling success and along with a mid-case type curve of 125 Bopd/EUR of 110 Mboe (100% oil) as analyzed by CIBC. Drilling occurs at depths between 1,000 and 1,400 meters in the region.
Specific terms and conditions related to due diligence conditions in the OTP are to be met prior to closing and final acquisition of the assets, and there is no guarantee that the acquisition will be completed until all of these conditions are met, including Pilot’s ability to complete financing for the acquisition.
Shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Although the Corporation believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Corporation can give no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking information. Pilot Energy Corp. undertakes no obligation to update publicly or otherwise revise anyforward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
(1) CIBC Resource Play Watch January 17, 2014