CALGARY, AB–(Marketwired – April 07, 2016) – Kelt Exploration Ltd. (“Kelt” or the “Company”) (TSX: KEL) is pleased to announce that it has closed its previously announced private placement of 4.7 million common shares issued on a “flow-through” basis in respect of Canadian Development Expenses (“CDE”) at a price of $4.70 per share, resulting in gross proceeds of $22.1 million (the “Private Placement”). Net proceeds to the Company, after expenses related to the offering, are estimated to be approximately $22.0 million. Proceeds from the Private Placement will be used to partially finance the Company’s drilling and completion expenditures during the remainder of 2016.
Kelt shall, pursuant to the provisions in the Income Tax Act (Canada), incur eligible CDE (the “Qualifying Expenditures”), after April 7, 2016 and prior to December 31, 2016 in the aggregate amount of not less than the total amount of the gross proceeds raised from the issue of the subject flow-through common shares. Kelt shall renounce the Qualifying Expenditures so incurred to the purchasers of the flow-through common shares on or prior to December 31, 2016.
The common shares issued in connection with the Private Placement will be subject to a statutory hold period of four months plus one day from the date of completion of the Private Placement, in accordance with applicable securities legislation.
This press release does not constitute an offer to sell or a solicitation of any offer to buy the common shares in the United States. The common shares have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.
British Columbia Montney Update
During the fourth quarter of 2015, Kelt drilled its first horizontal well into the Middle Montney formation at Inga, British Columbia. Prior to this well, all other horizontal Montney wells drilled at Inga and Fireweed were in the Upper Montney formation. This Middle Montney well located at 07-17-087-23W6 was completed in early 2016 using slick-water and consisted of 46 fractures. The well had an IP30 rate of 905 BOE per day and an IP60 rate of 728 BOE per day (66% oil and liquids and 34% gas). Kelt is excited about the initial results of this well as it could potentially lead to a second layer in its Montney Resource Play in British Columbia where it has a contiguous 100% owned land block of 103,000 acres (160 sections).
In the Upper Montney, to date, Kelt had drilled four wells that were completed using slick-water fractures on the western part of its contiguous British Columbia land block with IP30 rates ranging from 686 BOE per day to 1,296 BOE per day, and with oil and liquids, on average, comprising approximately 69% of the production. Recently, the Company has drilled and completed two additional wells located on the eastern part of its British Columbia land block. The 05-07-088-22W6 well, located furthest east and approximately in the middle from north to south of the land block, was completed using slick-water and consisted of 46 fractures. This well was tested for a period of 202 hours and during the last 24 hours of the flow test, the well produced 1,370 BOE per day (76% oil and liquids and 24% gas). The initial test results from this well is very encouraging and given the location of the well relative to all the other producing Upper Montney wells, provides Kelt with greater confidence in the areal extent and high liquids content of its Upper Montney potential on the Company’s 100% owned contiguous 160 section land block.
About Kelt
Kelt is a Calgary, Alberta, Canada-based oil and gas company focused on exploration, development and production of crude oil and natural gas resources, primarily in west central Alberta and northeastern British Columbia.