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Quattro Signs Agreement to Increase Working Capital by $4,000,000 and Confirms a Capital Budget of $12,800,000 in 2016

CALGARY, Alberta, Sept. 14, 2015 (GLOBE NEWSWIRE) -- Quattro Exploration and Production Ltd. ("Quattro" or the "Company") (TSX-V:QXP) is pleased to announce the signing of an agreement to increase working capital by $4,000,000. The increase in working capital shall be derived through an increase in the Company's long term debt from $6,264,500 to $10,000,000 and a reduction in repayment terms to reflect the increased production and reserve life of the Company over the past 2 years.

"The closing of the financing is anticipated to occur on or before September 30, 2015. Upon closing, the Company's increased liquidity and subsequent reduction in current liabilities, shall position Quattro to accelerate a number of optimization programs underway that shall further improve future cash-flow. The additional working capital and resulting improvements in free cash-flow by yearend 2015 are anticipated to fund a Capital Budget of $12.8 million in 2016," said Leonard Van Betuw, President and CEO of Quattro. "The approval of this financing by our Board of Directors is a commitment to our conservative plan and positions the Company to focus on the completion of work in progress in 2015 that has the capacity to bring Quattro's daily production to over 2,500 boe per day. Subsequently, a capital budget of $12.8 million in 2016 is targeted to complete an additional 6 high impact recompletions and the deviation or directional drilling of 4-6 wells that will further improve our operational efficiency, with the Company being in a solid position to reach its next goal of 6,000 boe per day, at a low cost and is currently tied in to Quattro's operating and regionally diversified installed gathering, compression and processing infrastructure. The Quattro operated facilities have a collective capacity to deliver 96 mmcf per day (net) of natural gas and 12,000 bbls per day (net) of sales oil. These facilities are proven, efficient and are essentially depreciated with an estimated replacement value of more than $100 million."

Starting in 2014, through to the end of 2015, Quattro will have invested in re-activations, acquisitions and exploration drilling, costing a total of approximately $16.5 million. Based on this estimate the Company's capital expenditures will have replaced the last two years of production and increased on a Proven Developed Producing basis the Company's reserves by 2,036,375 boe at a cost of $8.10 per boe. While on a Proven plus Probable basis, Quattro has increased reserves by 4,327,675 boe at a cost of $3.81 per boe. This is a strong indication of the Company's commitment to a disciplined approach to growth and focus on being a competitive and sustainable full-cycle energy producer.

"These results and significant advancements in Quattro's exploration efforts to date gives the Company confidence that further investment in its current assets and complementary acquisitions within current commodity prices will continue to create value for its shareholders, now and into the future. A further testament to the dedication and patient efforts of both Quattro's employees and its stakeholders," said Leonard Van Betuw.

The Company's business plan is and continues to evolve around a focused effort to work towards being a best in class progressive energy producer through the strengthening of its four pillars of growth;

  1. Operational Efficiency through the rigorous pursuit to improve Productivity.
  2. Innovation through the efficient and disciplined use of all Applied Sciences.
  3. The Capture, Consolidation and Optimization of the industries Value Chain.
  4. An Energy Producer focused on Margins at all Prices and levels of Demand.

The increase of the Term Loan facility to $10 million is anticipated to increased net debt to less than $6 million with the Company projecting debt to equity to be a ratio of 1:1 by June of 2016 and net debt to cash-flow also being maintained at less than 1:1 through 2016. The combination of funds being advanced on a fixed term loan basis and the reduction in the annualized repayment terms will result in an increase of approximately $4 million in working capital at the end of the 3rd quarter. The current and new loan on a blended basis equates to a fixed interest rate for four years of 6.95%, estimated to cost an average of less than $0.40 per boe over the life of the loan.

The Company's budget and projections are based on the current pricing of $2.65 per mcf for natural gas and a blended oil price of $50 per barrel for Western Select in 2015. These prices are projected to result in a blended commodity price for the Corporation of $29.50 per boe in 2015-2016, growing to $35 per boe in 2016.

Quattro continues to be diligent, directing efforts over the past 12 months to strengthen the foundation of the Company while completing a number of incremental capital programs towards the execution of Quattro's overall plan as summarized in our Corporate Presentation, to reach a daily production rate of 6,000 boe per day by year-end 2016.

For further information we encourage investors to visit our Website, www.qxp-petro.com to review our current Corporate Presentation for details.

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, with an expanding presence in Alberta and British Columbia. Its core low risk production base will provide the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. Quattro intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.

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. 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.

BOE presentation:

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 and 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 and Production Ltd. President and Chief Executive Officer Office (403) 984-3917 Direct Line (587) 228-7070 leonard@qxp-petro.com www.qxp-petro.com

Source:Quattro Exploration and Production Ltd.