CALGARY, ALBERTA–(Marketwired – May 25, 2016) – Chinook Energy Inc. (TSX:CKE) (“Chinook” or the “Company”) is pleased to announce that it has entered into an agreement to sell, effective May 1, 2016, certain of its assets located in the Gold Creek area of Alberta (the “Divested Assets“) for aggregate consideration of approximately $7.5 million, subject to customary closing adjustments. The disposition is anticipated to close on or before June 30, 2016. The Divested Assets include a 75% working interest in 20 sections of land (15 net sections) and related pipelines and production facilities. As at December 31, 2015, Chinook had total proved and total proved plus probable reserves associated with these properties of 98.6 mboe and 137.8 mboe, respectively, with associated estimated net present values of approximately $0.7 million and $0.9 million using forecast pricing at a 10% discount. Chinook’s first quarter 2016 average production from the Divested Assets was 23 boe/d (38% natural gas and 62% oil and natural gas liquids). The Company expects the disposition to have a minimal impact on its funds flow. Upon completing the sale of the Divested Assets, Chinook will have 24.5 sections (16.5 net) and 35 sections (20.5 net) of Montney lands at Gold Creek and Knopcik, respectively, and will retain ownership of the two (1.13 net) horizontal Montney wells it drilled at Gold Creek in 2014.
“We are pleased to have executed this agreement as it further strengthens our strong financial position and provides us with improved financial flexibility and additional stability to manage near term risks associated with the current uncertain and volatile commodity price environment” stated Walter Vrataric, President and Chief Executive Officer of Chinook. “The disposition is consistent with our strategy of rationalization of non-core assets to further focus on our Montney liquids rich natural gas positions at Birley/Umbach, British Columbia”, added Mr. Vrataric.
About Chinook Energy Inc.
Chinook is a Calgary-based public oil and gas exploration and development company that combines multi-zone conventional production and resource plays in western Canada.