CALGARY, ALBERTA–(Marketwired – Feb. 16, 2016) – Petrus Resources Ltd. (TSX:PRQ) (“Petrus” or the “Company“) is pleased to announce that it has entered into a letter of intent with an industry partner to swap developed and undeveloped land, production, and facilities interests in the Ferrier and Foothills areas of Alberta effective January 1, 2016 subject to customary closing conditions.
Petrus will acquire approximately 400 Boe/d and an average of approximately 40% working interest in 8 sections of predominantly undeveloped land in its Ferrier core area. Petrus estimates that it will acquire approximately 15 gross / 6 net undeveloped liquids-rich Cardium horizontal drilling locations.
Petrus will dispose of non-core assets of approximately 250 Boe/d, associated land, and a 19.56% WI in the Hanlan-Robb gas plant and will retain the ability to process its remaining production volumes at cost through the Hanlan-Robb facilities.
Petrus is also pleased to announce that its Board of Directors has approved an interim capital budget for the first half of 2016 in the amount of $11 million which includes the drilling of up to 3 gross / 2.5 net Cardium horizontal wells in the Ferrier area. The budget also includes funds for facilities and gathering system acquisitions and enhancements to further improve operational efficiencies and lower operating expenses. The interim capital budget will be funded with a portion of the Company’s operating cash flow. Excess free cash flow will be used to further reduce net debt.
Kevin Adair, CEO commented, “Petrus is excited to continue to add lands and drilling locations in Ferrier where our new plant and gathering infrastructure give us a significant cost advantage. During the current challenging operating environment, it is important to work with industry partners to optimize underutilized assets to the benefit of both parties. With our recent financing completed, management is focused on measured organic development in Ferrier and continued evaluation of additional strategic acquisition opportunities.”
Petrus is a public Canadian oil and gas company focused on property exploitation and strategic acquisitions in Alberta. The Company has established a sustainable platform of low decline, low operating cost assets with a multi-year inventory of repeatable, low risk, economic drilling locations. Petrus has 45.3 million shares issued and outstanding.