CALGARY, Alberta, April 30, 2015 (GLOBE NEWSWIRE) -- Quattro Exploration and Production Ltd. (TSX-V:QXP) ("Quattro" or the "Company") is pleased to report the completion of three acquisitions and one divestiture resulting in a total addition of 59,933 acres (net) of exploration land, bringing the Company's total net land position in Canada to 98,533 developed acres and 204,581 undeveloped acres (aggregate 303,134 acres) in the Company's core areas of operation.
Quattro initially will be expanding its operations to include the re-activations, work-overs and completions associated with the acquisitions in Saskatchewan, capitalizing on the Company's engineering and exploration activities to date in the region and expects to add more than 300 boe/d. This initial commitment sets the foundation to transition the Company's 3rd core area to grow beyond what the company defines as a sustainable core area of low cost production of more than 1,000 boe/d, with further capacity to grow through the exploitation of Quattro's substantial land position and facilities in the province. The acquisitions consolidate 3 additional low risk, tested light oil plays in Saskatchewan that combine production and optimization of 500,000 bbls of proven and probable reserves (2P) of oil, with high impact exploration lands with material undiscovered **OOIP of 25,000,000 bbls.
**Internally estimated by the Company and as defined under NI 51-101 and the COGE handbook.
"This closing marks the start of the Company's 2015 acquisition and divestiture plan, based on Quattro's commitment to continually re-evaluate and prioritize its robust land base of developed and undeveloped lands, whereby the Company will continue to divest of its non-core assets and acquire properties that complement its long term plans in the Western Canadian Sedimentary Basin," stated Leonard Van Betuw, President and CEO. "This series of transactions was initially negotiated in January of 2015, with the goal of reducing our operations to our three most highly coveted core areas, northeast British Columbia, east-central Alberta and southwest Saskatchewan. Quattro intends to continue to evaluate and focus its operations in Western Canada to areas and geological settings that are low in risk and cost while having high working interests, all while retaining a balance of high impact exploration in our core areas of operation."
The closing occurred on April 30th, 2015, consisting of a combination of purchase and sale agreements that resulted in Quattro acquiring the following:
- 100% interest in one developed non-producing oil and gas field in southwestern Saskatchewan. Prior to being shut in, the field was producing 120 boe/d, having assigned reserves estimated at 277,000 boe of oil and gas. The purchase includes a 100% interest in the recently upgraded oil separator and water injection facilities, 28 sq. km of 3D seismic and 85 kms of 2D seismic, identifying the potential expansion of the proven, producing Shaunavon, Madison, Belly River and Cantuar formations;
- 100% interest in a 7,680 acre oil sands lease expiring December 2023 in northern Alberta, which the Company anticipates will be developed utilizing proven conventional heavy oil production techniques; and
- 100% interest being assigned to the Company through the acquisition of the 50% non-operating interest in an exploration permit totaling 111,855 acres currently operated by Quattro Exploration and Production Ltd. in south central Saskatchewan, resulting in Quattro's interest in this exploration permit being fully recognized at 100%.
The purchases were funded from working capital, the sale of the Company's operated 100% (BPO) interest and 20% (APO) interest of certain heavy oil properties in the McMullen region of Alberta, and the crediting of all associated prepaid costs owing to Quattro from the seller that occurred prior to the effective date of January 1, 2015, having a book value of $1,347,700, in addition to other intangible and commercial considerations.
As a condition of closing of the purchase and sales agreements, the Company settled all previously reported legal proceedings and exchanged mutual releases with Cote Resources Ltd. With the signing of mutual releases Quattro is pleased to remove any uncertainties regarding Quattro's interest in the properties and is looking forward to proceeding with its exploration activities on its 111,855 acre permit in south central Saskatchewan at Wood Mountain and southwest Saskatchewan at Divide on an undisputed 100% basis.
Leonard Van Betuw added, "The acquisitions, sales and the unconditional settlement of the associated lawsuit has set the stage for Quattro to continue its consolidation plan. With 85% of Quattro's current production coming from Company-operated facilities, and over 40% of the Company's 532,000 (gross) acres in Western Canada being held on a 100% basis, Quattro is well-situated to fully execute its 2015 business plan. This positions the Company to grow without reliance on partners and a stable platform to advance our business plan in the next 6 months towards the goal of producing 40% oil and 60% natural gas with a planned 2015 exit production target of 3,000 boe per day."
About Quattro Exploration and Production Ltd.
Quattro Exploration and Production Ltd. ("QXP") continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, primarily in south central Saskatchewan, with an expanding presence in Western Canada. Our core low risk production base will provide us the capacity to aggressively pursue a series of high impact exploration and development efforts in Western Canada, Central and South America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth including reserves, production and profitability.
ADVISORY: Certain information in this news release, including the operations at the Company's properties, constitute forward-looking statements under applicable securities laws. Although Quattro believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Quattro can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this news release are made as at the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. It should not be assumed that the estimates of net present value of future net revenue attributable to the Company's reserves presented above represent the fair market value of the reserves. The recovery and reserve estimates of the Company's oil, NGL, and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Further there is no assurance that the forecast prices and costs assumptions will be attained and variances could be material.
Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.
This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
Trading in the securities of Quattro Exploration & Production Ltd. should be considered highly speculative. 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.
CONTACT: FOR FURTHER INFORMATION PLEASE CONTACT: Leonard Van Betuw Quattro Exploration & Production President and Chief Executive Officer Office (403) 984-3917 Direct Line (587) 228-7070 email@example.com www.qxp-petro.com
Source:Quattro Exploration and Production Ltd.