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.
[expand title=”Advisories & Contact”]This document contains certain forward-looking statements relating but not limited to Pilot Energy Corp’s expectations, intentions, plans and beliefs. Forward looking statements and information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. By its nature, forward-looking information necessarily involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Forward-looking information can often be identified by forward looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intent”, “estimate”, “may” and “will” or similar words suggesting future outcomes or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to: failure to establish estimated resources and reserves; the impact of increasing competition; the general stability of the economic and political environment in which the Corporation operates; the timely receipt of any required regulatory approvals; the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects which the Corporation has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Corporation to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Corporation to secure adequate product transportation; future oil prices; currency, exchange and interest rates; inflation; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market the oil it produces as well as other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results.
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
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