CALGARY, ALBERTA–(Marketwired – Nov. 21, 2016) – PetroShale Inc. (“PetroShale” or the “Company”) (TSX VENTURE:PSH)(OTCQX:PSHIF) is pleased to announce its financial and operating results for the third quarter ended September 30, 2016. The Company’s unaudited consolidated financial statements and corresponding Management’s Discussion and Analysis (MD&A) for the three and nine month periods ended September 30, 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. Currency figures presented herein are reflected in Canadian dollars, unless otherwise noted.
Q3 2016 HIGHLIGHTS:
During the three months ended September 30, 2016, we remained focused on advancing the drilling and completion of PetroShale’s first operated well, and achieved the following:
- Drilled the first well on our operated drilling spacing unit (“DSU”) (73% working interest) in the prolific Antelope area, which is anticipated to be completed and placed on production before year end. PetroShale’s DSU is immediately adjacent to an industry record Bakken well drilled in 2015, in which PetroShale has an 18.8% interest. That well has produced over 610,000 boe during its first 16 months on production, reinforcing our view that the Company’s operated acreage is high-quality.
- Participated in the drilling of three gross (0.7 net) non-operated wells, in one of our other core properties, all of which are expected to be completed and placed onto production by year end.
- Produced an average of 1,540 boe/d (83% liquids weighted) in the quarter.
- Generated operating netbacks of $20.55/boe (Company interest, gross of royalty; $25.70/boe net of royalty), consistent with the previous quarter and which we believe are indicative of the strong economic returns of our assets in a low commodity price environment.
RESULTS OF OIL AND GAS ACTIVITIES
|Three months ended||Nine months ended|
|Crude Oil (Bbl/d)||1,138||1,566||1,186||1,176|
|Natural gas and NGLs (Mcf/d)||2,409||1,339||2,202||737|
|Barrel of oil equivalent (Boe/d)||1,540||1,789||1,553||1,299|
|Operating Netbacks ($/Boe)|
|Revenue||$ 39.74||$ 45.45||$ 36.65||$ 48.94|
|Operating netback||$ 20.55||$ 24.03||$ 18.44||$ 26.52|
|Operating netback, on a net of royalty basis||$ 25.70||$ 30.88||$ 23.14||$ 34.10|
|Benchmark WTI price during the period (US$ / bbl)||$ 44.85||$ 46.65||$ 41.35||$ 50.93|
MESSAGE FROM THE CEO
We are very pleased to report that during the third quarter of 2016, we successfully drilled the first well on our operated, 73% working interest DSU which is located in the prolific Antelope area in the heart of the North Dakota Bakken. The well is currently being completed and we anticipate bringing it onto production before year end. In addition, we participated in three gross (0.7 net) wells in a non-operated, 24% working interest DSU in Antelope, which are also expected to be completed and brought on-line before the end of this year. The Company invested a total of $6.7 million during the quarter advancing this drilling activity and progressing to the completion stage.
PetroShale’s average production in the third quarter was 1,540 boe/d. With four new gross (1.5 net) wells currently being completed, equipped and tied-in, we anticipate a material increase to our corporate production volumes by the end of the year. Despite oil prices remaining below US$50 / bbl, our drilling activity is anticipated to generate an economic, risk-adjusted rate of return, further demonstrating the high-quality nature of our acreage.
PetroShale plans to use the incremental liquidity available from undrawn capacity on our US$80 million subordinated loan, which was drawn US$68.0 million at September 30, 2016, to complete the fourth quarter capital activity. In light of anticipated additional production, we continue to monitor incremental hedging opportunities.
Over the past three years, PetroShale has demonstrated our ability to acquire high-quality lands and we are now in a position to grow our asset base in the heart of the North Dakota Bakken / Three Forks. We believe that PetroShale is well positioned to deliver strong returns for our shareholders across a variety of price environments. The team is very excited about the upcoming results from our first operated well and its impact on the longer-term production and reserves potential for our Company. This will help support future development and capital allocation decisions for PetroShale. With the anticipated incremental volumes from our operated well coupled with the three new non-operated wells, PetroShale is poised for significant production expansion by year end 2016. We look forward to providing further updates and more information as results become available.
Until then, we wish to extend our gratitude to all employees, directors and shareholders for your continued support of PetroShale, and we look forward to updating you.
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.