CALGARY, ALBERTA–(Marketwired – May 19, 2016) – PetroShale Inc. (“PetroShale” or the “Company”) (TSX VENTURE:PSH)(OTCQX:PSHIF) is pleased to announce its financial and operating results for the three month period ended March 31, 2016. The Company’s unaudited consolidated financial statements and corresponding Management’s Discussion and Analysis (MD&A) for the three month period ended March 31, 2016, are available on SEDAR at www.sedar.com, on the OTCQX website at www.otcqx.com, and on PetroShale’s website at www.petroshaleinc.com. Copies of the materials can also be obtained upon request without charge by contacting the Company directly. Please note, currency figures presented herein are reflected in Canadian dollars, unless otherwise noted.
Q1 2016 HIGHLIGHTS:
PetroShale continued to execute our strategy focused in the heart of the North Dakota Bakken, with demonstrated success growing our asset base and productive capacity, positioning the Company for future growth. During the quarter, we achieved the following:
- Increased production to 1,376 boe/d during the first three months, an increase of 82% from 757 boe/d in the same quarter in 2015, a result of our participation in the drilling and completion of new wells and the acquisition of producing wells in 2015.
- Participated in 57 gross (1.15 net) wells at various stages of completion, of which 8 gross (0.66 net) wells were brought on production late in the quarter, and are expected to positively impact production volumes in the second quarter of 2016.
- Invested $2.6 million directed to drilling and completions activities described above and $3.3 million on acquisitions of acreage in the core of PetroShale’s focus area, further re-enforcing the Company’s high-quality land position and future development potential.
- Realized positive operating netbacks of $13.35/boe (Company interest, gross of royalty; $16.84/boe net of royalty), despite the significant decline in world oil prices, which averaged in the low US$30/bbl range during the period but have started to strengthen in the second quarter.
- Subsequent to quarter end, secured an increase of US$20 million to our subordinated loan facility, bringing the new borrowing capacity to US$80 million, extending the maturity date to December 31, 2017 and enhancing PetroShale’s financial support.
- Subsequent to the end of the quarter, acquired additional undeveloped acreage and a producing oil well in our core focus area for aggregate consideration of $5.1 million.
RESULTS OF OIL AND GAS ACTIVITIES
|Three months ended|
|Crude Oil (Bbl/d)||1,194||705|
|Natural gas (Mcf/d)||1,091||309|
|Barrel of oil equivalent (Boe/d)||1,376||757|
|Operating Netbacks ($/Boe)|
|Revenue||$ 31.98||$ 44.07|
|Operating netback||$ 13.35||$ 22.60|
|Operating netback, on a net of royalty basis||$ 16.84||$ 28.98|
|Benchmark WTI price during the period (US$ / bbl)||$ 33.35||$ 48.54|
MESSAGE FROM THE CEO
With high quality assets and continued financial support, PetroShale is well positioned to execute on our business strategy of enhancing and developing our core land position. During the first quarter of 2016, we faced an extremely challenging commodity price environment where oil prices dipped below US$30 per barrel. We took the opportunity to capitalize on broader market weakness and made some strategic acquisitions, including the addition of undeveloped acreage in the heart of our core Antelope area. Subsequent to the end of the quarter, we added to our land position in Antelope by acquiring additional undeveloped acreage along with a producing oil well. PetroShale has commenced drilling operations in respect of our first operated well which we intend to complete in the third quarter of 2016.
Over the past two years, PetroShale’s production has continued to trend upward and show meaningful growth. Production in the first quarter of 2016 increased 82% over the same quarter of 2015, but was down marginally compared to the previous quarter. This decline was temporary and primarily due to production from existing wells being shut-in to facilitate new drilling and completion operations on adjacent locations. We are also experiencing a deferral of production enhancement activities from some of our operator partners. Until there is a sustained increase in oil prices, we believe production will not be fully optimized. However, we anticipate production will increase as PetroShale carries out drilling and completion activities later in 2016 and realizes the full impact of volumes associated with new wells that were brought on-stream in the first quarter.
We would like to thank all of our employees, directors and shareholders for your continued support of our strategy and our Company, and we look forward to updating you on PetroShale’s progress and achievements in the coming quarters.
M. Bruce Chernoff, Executive Chairman and CEO
PetroShale is an oil company engaged in the acquisition, development and consolidation of interests in the North Dakota Bakken / Three Forks.
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.