Kelowna, British Columbia (FSCwire) – Georox Resources Inc. (“Georox” or the “Corporation”) (GXR:TSX-V; OF6A:FRA) is pleased to announce that it has completed its previously announced agreement to acquire certain high working interest producing oil (~94%) and natural gas (~6%) interests in Southwest Saskatchewan (Luseland, Hearts Hill and Cuthbert) and Eastern Alberta ( Cuthbert), from arm’s-length private vendors (the “Acquisition” or the “Transaction”). Georox was Transaction lead, having initiated and concluded arrangements, but was significantly supported by an arm’s-length private company participant (“Participant”) responsible for 80% of the approximate $5.4 million (net to Georox approximate $1.1 million) Transaction.
The Transaction consists of the acquisition of working interests in a total of 64 sections (approximately 41,526 acres) of land (62 net sections) with an average overall 96.6% working interest. Approximately 94% of the land is located in Saskatchewan. There are 240 oil and 12 natural gas wells producing on the properties. Georox believes that a number of suspended wells have potential for reactivation and accordingly a review process will be initiated. There are also approximately 34 sections of undeveloped land.
Georox has become the operator of the wells where operatorship can be transferred; being the majority of the wells (largely with an acquired 100% working interest). Georox operatorship of the properties acquired in the Transaction will be supported by the Participant for a minimum of 18 months following closing and be subject to the terms of a joint operating agreement entered into between Georox and the Participant.
Georox has an option to acquire from the Participant 10% of the assets acquired in the Transaction for a period of 18 months following closing for $1.25 million, with an effective date being the date of the option exercise.
At Closing on June 11, 2018, average total production/sales from the Transaction properties for 5 months was approximately 1290 boepd (1,222 bopd and 68 boepd of natural gas); Georox net of approximately 258 boepd based on its 20% interest.
Georox believes that there is significant opportunity to reduce operating expenditures, potential beyond primary recovery through the implementation of water flood/pressure support as well as numerous reactivations and infill drilling opportunities which may significantly extend the life and increase recoverable reserves from the Transaction properties.
Georox is a Canadian natural resource company engaged in the acquisition, exploration, development and exploitation of oil and gas properties in Western Canada.