Acquisition of Producing Properties at Donalda, Alberta
CALGARY, ALBERTA--(Marketwired - March 25, 2014) - Quattro Exploration and Production Ltd. (TSX VENTURE:QXP) ("Quattro" or the "Company") is pleased to announce;
Milo-Clarke Lake, British Columbia
On March 24th, 2014, Quattro closed the acquisition of 100% of Progress Energy Canada, Japex Montney Ltd. and Petroleum Brunei Montney Holdings Ltd's interests, including all wells, facilities and lands as outlined in the agreement as the Milo-Clarke Lake Region of British Columbia.
The effective date for the acquisition is February 1st, 2014, which increases Quattro's production in the region by 900 mcf/d (net) bring Quattro's production at Milo-Clarke Lake up to 1,850 mcf/d (net). On closing, Quattro will become the Operator of Record for the facilities and the associated wells while increasing its ownership in the related facilities to 52%. The facilities are well-maintained, with a designed capacity of 20,000 mcf/d of compression, dehydration and treating. Quattro now holds a 48% operating interest in the wells which in February of 2014 averaged 3,850 mcf/d. The wells are long life in nature and have produced to date a total of 59.6 BCF of gas from the Slave/Pine Point formation and are located within Quattro's current developed and undeveloped land base. The purchase price was $750,000 plus G.S.T., and the assumption of the associated decommissioning costs estimated to be approximately $680,000 (net) less further post-closing adjustments as would be normally associated with an acquisition of this nature, for a total cost of $1,430,000 or $9,530 per flowing boe/d. The acquisition was funded through the combination of cash on hand and current cash-flow.
Noel, British Columbia
Quattro would also like to announce the sale of its 80% interest in exploration lands located at Noel, BC to Nordic Oil and Gas Ltd. In connection with the sale, Quattro acquires a 2.5% GORR on the lands and retains an option to convert to a 25% net operating interest at the casing point of the first well. The sale price was $300,000 paid by way of the issuance of a securitized Promissory Note for $100,000, due on or before December 2014, yielding 8% interest per annum and 4,000,000 units of Nordic ("Units"), each Unit consisting of one (1) Class A common share of Nordic ("Nordic Shares") and 4,000,000 purchase warrants ("Nordic Warrants"). Each Nordic Warrant is exercisable into one Nordic Share at a purchase price of $0.05 per share prior to March 20th, 2016.
Donalda, Alberta
Quattro has also executed a binding letter of intent for the acquisition from a private Alberta based company of a combination of 1,000 mcf/d of natural gas along with the associated gathering and compression and spare equipment. The results will be, 1,000 mcf/d being added to Quattro's Donalda facilities and a 600 mcf/day (net) increase in production. The Company also acquired certain additional lands, minerals rights and suspended wells along with the associated undeveloped land. The effective date of the acquisition will be February 1st, 2014.
The acquisition adds additional flexibility and capacity to further increase production through reactivations in the region with the goal of bringing Quattro's Donalda production to greater than 3,000 mcf/d (net) in the 3rd quarter of 2014. Upon closing the Company's developed land base at Donalda will be 44,465 acres (net) developed and 27,810 acres (net) of undeveloped lands.
The purchase price is $350,000 plus G.S.T., and the assumption of the associated decommissioning costs estimated to be approximately $925,000 (net) with further post-closing adjustments as would be normally associated with an acquisition of this nature, for a total cost of $1,275,000 or $12,750 per flowing boe/d, which also includes all developed and undeveloped lands. The acquisition is being funded through a combination of cash on hand and current cash-flow. The transaction is scheduled to close on or before April 30th, 2014.
Leonard Van Betuw, President and CEO commented, "As we announced in our February 25th, 2014 news release, these transactions are evidence of the execution of Quattro's continuing business plan involving the consolidation of its producing asset base and the consolidation of non-operating interests within the Company's core areas, consisting of an extensive network of processing facilities and pipeline gathering systems. We have a very dedicated team at Quattro, and both the Company and staff, are pleased with its progress in achieving its ambitious goals. The Company continues to advance its remediation plans and with the addition of this 1,500 mcf/d announced today we are aggressively nearing our previously announced production and asset targets as set out for the first half of 2014."
"The Company is now the operator of record and has a greater than 65% ownership in 8 facilities. Quattro's operated facilities have a combined capacity of 12,000 BOEPD (net). In Canada it continues to Quattro's plan to continue to concentrate on being a diversified and efficient operator of these facilities. The Company's efforts are increasing both volumes and netbacks as we aggressively improve equipment utilization through optimization and consolidation as shown with the announcements made today. Quattro is pleased on how our strategy of developing a diversified, low-risk material growth plan in western Canada is advancing, while we continue our broader commitment to simultaneously improving our corporate value both in western Canada and Central America.", added Mr. Van Betuw.
Read more at https://www.stockhouse.com/news/press-releases/2014/03/25/quattro-closes-acquisition-at-milo-clarke-lake-north-east-british-columbia#0rAck8W1vkSHcqGZ.99