(TheNewswire)
June 1, 2023 – TheNewswire - Calgary, Alberta – Sonoro Energy Ltd. (“Sonoro” or the “Company”) (TSXV:SNV.H) is pleased to report that it has completed the previously announced Western Canadian Sedimentary Basin (“WCSB”) Farm-In Agreement (the “Agreement”), with an arms-length third party, building the first step of the Company’s strategy to build a solid base of production and cash flow in the WCSB.
Under the terms of the Agreement, Sonoro will be the operator and earn a 70% working interest in a proven Waseca channel heavy oil resource fairway. In consideration for acquiring the 70% working interest in this 1,840-acre contiguous land block (the “Asset”), Sonoro has committed to fund up to CAD$5 million dollars (on a gross basis) and drill up to 5 wells (the “Carry”) with the first well scheduled to spud no later than September 30, 2023. Upon completion of the Carry, Sonoro will earn a 70% working interest in the Asset which contains numerous follow up drilling locations given the pervasiveness of the channel sands. After the Carry, further development will be at a 70%/30% working interest split between Sonoro and the counterparty, an Operating Agreement has also been executed between the parties which govern the joint operating procedures. After the final release from the security holder, expected by June 15, 2023, of the counterparty and Sonoro proving it can fund an initial minimum of CAD$2 million by Jul 31, 2023, the Farm-In Agreement will be deemed closed.
This Asset directly offsets an established field which is currently producing over 1,850 bbl/d; having recovered 11 million barrels to date within the same Waseca channel trend. With our team’s heavy oil experience and established cold heavy oil production systems (“CHOPs”) which are proven in this area, Sonoro believes it can drill low risk, low-cost wells and bring on production quickly with area vertical CHOPs type wells IP90 rates of between 60-90 bbl/d. A typical newly drilled, completed and equipped heavy oil well is expected to cost less than CAD$750,000 each with payouts estimated to be less than 1 year under prevailing oil prices and heavy oil differentials. Sonoro has identified the potential for 30 wells to be drilled on 40 acre spacing. Furthermore, given the average 17 meters of net pay within this Waseca channel, there is further upside to down space to 20 acre spacing. The Asset will produce heavy oil which is receiving favorable differentials due to various market conditions and is expected to remain as such with new egress and refining options being made available, in combination with lower-than-average operational costs, the Company expects robust netbacks for the Asset. The Company is also in the process of commissioning a third-party resource report for the Asset that would be NI 51-101 compliant.
Pursuant to the Agreement, the counterparty, which holds green technology patents (carbon sequestration and hydrogen generation), upon termination of production, may take over the wellbores and associated liabilities for their patented processes. Hence, Sonoro may not incur any abandonment or reclamation costs associated with the Asset.
The team is also pursuing several other WCSB opportunities, and is optimistic that there will be additional assets that the Company will have access to and be able to expand our WCSB base. With the establishment of the Company resource and operating base in the WCSB it will be better positioned to continue to pursue high impact transformation opportunities internationally as per the strategy announced previously.
Further to the warrant extension press release of May 25, 2023. Sonoro confirms that the TSXV has approved the extension of 7 million warrants at 10 cents until May 30, 2024, however the 5,157,921 warrants priced at 7 and 7.5 cents have not been extended and have expired.
Sonoro also announces that 6,400,000 incentive stock options have been granted to management and directors, pursuant to the Company’s Stock Option Plan, at an exercise price of $0.05 with an expiry date of May 30, 2028 subject to the approval of the TSX Venture Exchange. Following this grant, the Company has a total of 10,378,333 stock options outstanding.
Forward-looking Statements
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "estimates," "seeks" and similar expressions. In particular, without limiting the generality of the foregoing, this news release contains forward-looking information regarding the opportunities discussed.
Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals, changes in legislation including but not limited to income tax, environmental laws and regulatory matters, and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect Sonoro's operations or financial results are included in Sonoro’s reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or by contacting Sonoro. The forward-looking statements contained in this news release are made as of the date of this news release and Sonoro does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information to participate in future financing, please contact the company at:
For further information to participate in future financing, please contact the company at:
Sonoro Energy Ltd.
info@sonoroenergy.com
or
+1.403.262.3252
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