Calgary, Alberta–(Newsfile Corp. – October 16, 2023) – Lycos Energy Inc. (TSXV: LCX) (“Lycos” or the “Company“) is pleased to advise that it has closed the previously announced acquisition (the “Acquisition“) of Durham Creek Exploration Ltd. (“DCEL“), a privately held, heavy oil producer. Lycos acquired all of the issued and outstanding common shares of DCEL for total consideration of $22.5 million, consisting of $12.5 million in cash and 2,816,907 common shares of Lycos (“Lycos Shares“) at a deemed price of $3.55 per Lycos Share. Significant growth opportunities have been identified on the 55 net sections of DCEL land, including over 70 drilling locations.
Concurrent with the Acquisition, Lycos completed a bought-deal financing including the exercise of the over-allotment option (the “Offering“) of 9,860,100 Lycos Shares at a price of $3.55 per Lycos Share for gross proceeds of approximately $35.0 million. A portion of the net proceeds from the Offering were used to fund the cash purchase price of the Acquisition. Following the completion of the Acquisition and the Offering, there are 53,081,147 Lycos Shares issued and outstanding.
Recent Drilling Results
Lycos is pleased to provide results on its most recent Mannville multi-lateral oil wells, consisting of one extended reach “sweeper” 17,000m fishbone, three shorter fishbones, one conventional multi-lateral and two new generation “wine rack” multi-laterals.
Five of the seven wells on stream have substantially outperformed expectations. Lycos is very encouraged by the “sweeper” extended length Sparky fishbone, with an IP25 of over 375 boe/d, making it the best fishbone well drilled by the Company to date. Drilling length, well geometry and changes in drilling design have substantially increased observed initial rates. The two Alberta Sparky wells were drilled with prior generation fluid systems and have taken longer to clean up. Both wells continue to improve in oil rates and decline in water rates.
Well Type | Drilled Length (m) |
Cumulative Oil (bbl) |
Production Rate Since Inception (boe/d) |
Current Production Rate (boe/d) |
Zone | Production Days On |
Sweeper Fishbone | 17,150 | 9,915 | 397 | 375 | Sparky | 25 |
Wine Rack | 10,859 | 8,505 | 340 | 300 | Sparky/GP | 25 |
8 Leg Multi-lateral | 10,163 | 17,040 | 289 | 255 | Rex | 59 |
Wine Rack | 8,025 | 5,185 | 288 | 260 | Sparky/GP | 18 |
Half Fishbone | 13,424 | 14,720 | 189 | 152 | Rex | 78 |
Fishbone | 7,349 | 5,532 | 77 | 125 | Sparky | 72 |
Fishbone | 9,858 | 7,412 | 96 | 108 | Sparky | 77 |
Lycos plans to bring on one more “wine rack” well, two more fishbones and one more conventional multi-lateral by year end. The Company’s current production exceeds 4,000 boe/d.
Advisors
National Bank Financial Inc. acted as exclusive financial advisor to Lycos with respect to the Acquisition.
Stikeman Elliott LLP acted as legal counsel to Lycos with respect to the Acquisition and the Offering.
Burnet, Duckworth & Palmer LLP acted as legal counsel to DCEL with respect to the Acquisition and as legal counsel to the Underwriters in respect of the Offering.
About Lycos
Lycos is an oil-focused, exploration, development and production company based in Calgary, Alberta, operating high-quality, heavy-oil, development assets in the Lloydminster, Greater Lloydminster area and Gull Lake, Saskatchewan.