SALT LAKE CITY, July 10, 2014 /PRNewswire/ -- Richfield Oil & Gas Company (OTCQX: ROIL) ("Richfield") announced today that since entering into the Agreement and Plan of Merger ("Merger") with Stratex Oil & Gas Inc. (OTCBB: STTX) ("Stratex") announced on May 7, 2014, which must be approved by Richfield shareholders, Richfield has received $1.7 million in proceeds from the $3 million Loan Agreement with Stratex which has been advanced to fast forward the pre-merger development of Richfield's high quality and scalable Kansas properties, under a mutually agreeable work program.
Since May 7, 2014 Richfield's production in the Kansas field has increased from 58 bopd gross (42 bopd net) to 152 bopd gross (133 bopd net) this 263% increase in production is attributable to completed reworks on 7 wells which includes the replacing of tubing, pumps and acid treatments. Reworks have begun on 3 additional wells which is expected to bring our production to approximately 207 bopd gross (183 bopd net). This work will be completed over the next two weeks, assuming we have good weather conditions in Kansas. In addition, Richfield will drill two new wells in Kansas within currently producing fields. The two new wells will be drilled over the next 4 weeks. During the past few weeks the rework schedule has been hampered by excess rain in Kansas which delayed the completion of the 3 well reworks.
Richfield's Kansas properties are located within the prolific Central Kansas Uplift ("CKU"), an area noted for long life oilfields, excellent historical well control, relatively shallow target payzones and superior wellbore economics. The development of Richfield's Kansas properties will continue while the regulatory approvals and shareholder approvals are obtained for the Merger. In addition to the above 10 wells, Richfield has an inventory of 85 low risk, low cost and high rate of return drilling, behind pipe, salt water disposal, offset and/or rework/recompletions in the Arbuckle formation (57 new drilling, 28 recompletions). The Arbuckle, a vast water drive reservoir system, has produced more than 2.4 billion barrels of oil since the late 1920s. As leasehold ownership in this area has long been fragmented, excellent potential exists for bolt-on acquisitions and drilling opportunities.
Richfield's asset base also includes world class upside represented by Richfield's ownership of extensive Central Utah Overthrust acreage (totaling 33,270 gross, 12,530 net acres). Management believes there is the potential for the discovery of very significant reserves, associated with unbooked resource potential in the Navajo Sandstone, Mancos Shale, and deeper Mississipian formations (170 prospective drilling locations). Richfield owns an 89.5% working interest ("WI") in its HUOP Freedom Trend Prospect and a 56.6% WI in the Liberty Prospect. The HUOP Freedom Trend Prospect is on trend with two significant discoveries made by Occidental Petroleum Corp. and Wolverine Gas & Oil, announced in 2003 and 2008. In addition, Richfield owns a 3% WI in a 20,000 acre Area of Mutual Interest ("AMI") through its Independence Project, a high thermal maturity and organically rich Mancos Shale play (31 drilling locations), which Management believes could shortly become a highly sought after shale play in the continental United States.
About Richfield Oil & Gas Company
Richfield is an independent exploration and production company headquartered in Salt Lake City, Utah with substantially all of its current producing assets located in Kansas, with potential high impact leases in Utah, and Wyoming. Founded in April 2011, Richfield is dedicated to exploiting its asset base and to growing organically through the exploitation and development of its existing field inventory by the use of drilling, workover, recompletion and other lower-risk development projects, in order to increase proved reserves and production. Please visit www.richfieldoilandgas.com for additional information.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed transaction between Stratex and Richfield, including any statements regarding the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company and products, and any other statements regarding Stratex' and Richfield's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are often, but not always, made through the use of words or phrases such as "may", "believe," "anticipate," "could", "should," "intend," "plan," "will," "expect(s)," "estimate(s)," "project(s)," "forecast(s)", "positioned," "strategy," "outlook" and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the timing to consummate the proposed transaction; the risk that a condition to closing of the proposed transaction may not be satisfied; the risk that a regulatory approval that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; Stratex' ability to achieve the synergies and value creation contemplated by the proposed transaction; Stratex' ability to promptly, efficiently and effectively integrate Richfield's operations into those of Stratex; and the diversion of management time on transaction-related issues. Additional information concerning these and other factors can be found in Stratex' and Richfield's respective filings with the SEC, including their most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Stratex and Richfield assume no obligation to update any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Contact: Michael Cederstrom, 801-519-8500
SOURCE Richfield Oil & Gas Company