CALGARY, ALBERTA–(Marketwired – May 29, 2015) – STORM RESOURCES LTD. (“Storm” or the “Company“) (TSX VENTURE:SRX) is pleased to announce that it has entered into a definitive purchase and sale agreement with an oil and gas company with respect to the disposition (the “Disposition“) of the Company’s properties (the “Assets“) in the Grande Prairie area of northwest Alberta. Details of the Disposition are as follows:
- Disposition price is $24.0 million, subject to standard closing adjustments. A deposit of $1.2 million has been paid with the remaining funds to be paid at closing.
- The closing date of the Disposition is expected to occur on or before July 31, 2015, with an effective date being the date that is 30 days prior to the closing date.
- In the first quarter of 2015, production with respect to the Assets averaged 727 Boe per day (52% light oil plus natural gas liquids).
- Based on an independent reserve report dated December 31, 2014 prepared by InSite Petroleum Consultants Ltd. in accordance with National Instrument 51-101, the Assets contain an estimated 1,890 Mboe total proved reserves and 4,267 MBoe of proved plus probable reserves. Future development capital assigned to the Assets was $37.4 million.
- The net proceeds from the Disposition will be used by the Company to reduce bank indebtedness.
- Closing of the Disposition is subject to, among other items, the purchaser receiving required regulatory approvals, which include but, are not limited to, the approval of the TSX Venture Exchange.
Storm’s remaining Alberta assets will consist of one property in the Valhalla area which produced 189 Boe per day in Q1 2015 (94% natural gas).
Boe Presentation – For the purpose of calculating unit revenues and costs, natural gas is converted to a barrel of oil equivalent (“Boe”) using six thousand cubic feet (“Mcf”) of natural gas equal to one barrel of oil unless otherwise stated. Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of six Mcf to one barrel (“Bbl”) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All Boe measurements and conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Mboe means 1,000 Boe.
Forward-Looking Statements – The information in this press release contains certain forward-looking statements within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions. In particular, and without limitation, this press release contains forward-looking statements and information concerning the closing date of the Disposition, reserves and anticipated use of proceeds from the Disposition. Statements relating to “reserves” are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.
The forward looking statements and information are based on certain key expectations and assumptions made by Storm, including: expectations and assumptions concerning prevailing commodity prices and exchange rates, applicable royalty rates and tax laws; future well production rates and reserve volumes; the timing of receipt of regulatory and shareholder approvals; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; and the ability of the purchaser to successfully finance the acquisition of the Assets. Although Storm believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Storm can give no assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and dispositions; failure to realize the anticipated benefits of acquisitions and dispositions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and change in legislation, including but not limited to tax laws, royalties and environmental regulations.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Storm are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.SEDAR.com) and on Storm’s website (www.stormresourcesltd.com). The forward-looking statements contained in this press release are made as of the date hereof and Storm undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.
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 THIS RELEASE.
President and Chief Executive Officer
Chief Financial Officer
Manager, Corporate Affairs