Strategx Elements Corp STRXF

2019 can be trans-formative year for shareholders

[Stock20]

Serowe Gas Project

Features of Serowe CSG Project – Republic of Botswana

*    Serowe CSG Project is a 100% owned 1,129,000 acre coal seam gas          project 
*     Active 2018-2019 appraisal programme planned.
*     Located in the heart of the Kalahari CSG Fairway.

• Environmental Management Plan (EMP) for Strata-X was approved for up to 20 well program.
• EMP covers the original permits covering 273,000 acres.
• Coal Seam Gas expert appointed for evaluation program.

• Turnkey Drilling Contract for up to two CSG appraisal wells executed with Danos Drilling – Gaborone,  Botswana.
• Appraisal wells will be the first to drill and flow test bright and gas saturated coals within Strata-X’s interpreted high graded area.
• The Company holds 100% equity in approximately 320,000 acres within the interpreted high grade area of the Serowe CSG Project.

 *    Strata-X has substantial land holdings within the internally mapped           high-graded area.
*     MHA Petroleum Consultants have calculated a Prospective                        Resources of 3.3 TCF (Trillion Cubic Feet) net to Strata-X over the              Serowe CSG Prospect. (1)
*     Ample tenement term to establish production; tenement active into          2025.
*     Fully funded for 2 drills, First drill planned for 1st week of Feb 2019.

An active 2018-2019 appraisal programme is planned for the Serowe Gas Project, where the Company retains a 100% interest in 1,129,000 acres in the heart of the Kalahari Basin. The 3.34 Tcf Prospective Resource tenement position directly offsets projects approved for commercial CSG development. The Serowe Gas Project will be the growth driver for the Company in 2018 and beyond as it executes on a staged exploration plan to delineate and prove-up the CSG resource. The initial focus of the Company’s 2018 appraisal programme will be to productiontest direct offset areas within the Company identified high-graded area, where ASX listed peers have converted more than 3 TCF of prospective resources into contingent resources.

During the appraisal programme, the Company will be seeking commercial market opportunities to sell the CSG resource within Botswana. The Republic of Botswana is moving to generate more electricity from clean resources like natural gas, along with searching for alternatives to coal and the widespread use of expensive imported diesel fuel. Along these lines, the initial market opportunities for the Company’s natural gas will be gas-to-electric power plants and diesel-to-CNG conversions at large industrial facilities.

Strata-X continues to review its development options in the Illinois Basin where the Company has 2P reserves of 1.332 million barrels net.* The Company plans to either bring projects forward in the Illinois Basin over the next year or seek to farm out the opportunities providing Strata-X shareholders upside value. Consistent with the above approach, the Company is continuously reviewing project opportunities that will be accretive and complimentary to management’s skillset and build shareholder value.

For the quarter ended 30 September 2018, the Company invested ~USD$6,000 in the Illinois Basin Oil Project, principally on project maintenance and ~USD$151,735 into the Serowe CSG Project mainly on buy out payments and expenses related to completing the EMP.

The Serowe Gas Project is an underexplored and underdeveloped opportunity, covering the coal seam gas deposit fairway in the Republic of Botswana. The economies of the Republic of Botswana and its regional neighbors are rapidly growing with energy demand poised to skyrocket. The Republic has set goals for promoting the exploration and development of natural gas resources in the county to meet these demands.

ILLINOIS BASIN USA ASSET

In a report dated 30 June 2018, Strata-X’s independent engineer, Chapman Petroleum Engineering Ltd (Chapman), confirmed Proved plus Probable Reserves are 1.282 million barrels of light oil net to the Company on the Blue Spruce project. Strata-X currently has the rights to 720 net acres of the Blue Spruce project where it has identified 19 oil development locations. Chapman calculated a before tax Net Present Value (BTNPV disc 10%) of the Blue Spruce project to the Company of USD$46.1 million (unrisked). 

Total Assets       $12,249,475
Total Liabilities    $1,003,385