PETROSHALE ANNOUNCES STRATEGIC ASSET ACQUISITION IN NORTH DA
PetroShale to acquire North Dakota drilling interest
2014-01-15 17:40 ET - News Release
An anonymous director reports
PETROSHALE ANNOUNCES STRATEGIC ASSET ACQUISITION IN NORTH DAKOTA
PetroShale Inc. has finalized an agreement to acquire an 18.75-per-cent working interest in a proposed drilling unit in McKenzie county, North Dakota, for a total purchase price of $3.25-million (U.S.), including 200,000 common shares issued at a price of $1.34 per share. The company intends to use existing credit facilities and cash resources to finance the cash portion of the purchase price and anticipates the transaction will close before the end of January.
This transaction is a continuation of PetroShale's strategy to selectively acquire acreage that offers highly economic upside potential, and is operated by a leading basin operator.
Transaction details
The acquired acreage is being spaced for eight wells and will be operated by EOG Resources, Inc. Of these eight gross drilling locations, four locations have reserves assigned to them as outlined below. The following reserve information relates solely to this transaction, and does not reflect the company's pre-existing reserves. These reserve volumes are presented on a net working interest basis, before royalties.
Proved reserves (2) 474.8 thousand barrels of oil equivalent; proved plus probable reserves (2) 697.7 Mboe; proved reserves (discounted 10 per cent/year) (1)(2) $9.3-million (U.S.); proved plus probable reserves (discounted 10 per cent/year) (1)(2) $14.9-million (U.S.).
Notes:
1. Based on a Dec. 31, 2013, forecast of West Texas Intermediate (WTI) for oil prices and Nymex Henry Hub for natural gas prices, adjusted for quality and transportation costs.
2. Based on the working interest to be acquired in the reserves before the calculation for royalties, and before the consideration of the vendor's royalty interest reserves. Reserve estimates for the assets were prepared by PetroShale's independent reserves evaluator Netherland, Sewell & Associates Inc. (NSAI) as of Dec. 31, 2013. The reserves data summarizes the crude oil, natural gas liquids and natural gas reserves and the net present values of future net revenue for these reserves using forecast prices and costs. The reserves information has been prepared in accordance with the standards contained in the COGE handbook and the reserve definitions contained in NI 51-101, with the exception that the effective date of the report precedes the date of the acquisition.
Investor relations firm retained
PetroShale also announces it has retained 5 Quarters Investor Relations, Inc. (5QIR) to provide strategic investor relations (IR) services on behalf of the company. 5QIR is a Calgary-based capital markets communications firm providing strategic counsel on financial communications, continuous disclosure compliance and pro-active corporate outreach programs for public and private companies.
Under the terms of the agreement, 5QIR will provide investor relations services to the company for a term of three months, after which the agreement will automatically renew on the same terms, subject to termination upon 14 days written notice by either party. As consideration for the services, 5QIR will be paid a retainer fee of $3,000 per month. 5QIR acts at arm's length to PetroShale and does not have any interest, directly or indirectly, in PetroShale or its securities, or any right or intent to acquire such an interest.
The appointment of 5QIR remains subject to approval by the TSX Venture Exchange.
About 5QIR
Based on the belief that effective investor relations goes beyond four quarters, 5 Quarters Investor Relations, Inc. was established to support public companies with financial communications, continuous disclosure compliance and pro-active investor outreach programs. The firm is based in Calgary, Alta., and is owned and operated by Cindy Gray, a seasoned IR professional with over 16 years of experience working in IR as well as leading the oil and gas business development practice for Toronto Stock Exchange and TSX-V from Calgary. For further information, please visit 5QIR's website.
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