Quattro Signs Letter of Intent to Sell Oil And Natural Gas Properties in Western Canada for $24,250,000
August 02 2016 - 7:11AM
Quattro Exploration and Production Ltd. (TSXV:QXP)
("
Quattro" or the "
Company") is
pleased to announce the signing of a Letter of Intent for the sale
of certain oil and gas production, facilities and lands in western
Canada to an Alberta-based oil and gas exploration and production
company (the “
Sale”)
.
The aggregate purchase price for the acquisition
is $24,250,000 including cash payments totaling $8,000,000, the
issuance of $4,000,000 class A common shares at a price of $0.50
per common share, representing a minimum 12.5% of the seller’s
common shares outstanding at closing and the assumption of
estimated decommissioning liabilities totaling $12,250,000.
Based on Quattro’s independent 2015 year end
reserve report, the oil and gas assets being sold represent 40% of
the Quattro’s reserves and 35% of the Company’s lands.
Production was averaging 700 boe/d and were assigned total proven
reserves (1P) estimated at 2.68 million boe, valued at $22.5
million within a land base of 212,997 acres (gross) or 147,576
(net) acres (the “Properties”).
All conditions for closing of the purchase of
the Properties are anticipated to be completed on or about October
15th, 2016, with the Acquisition having an effective date of August
1, 2016, and is subject to a number of customary conditions
including, but not limited to, completion of due diligence and
approval of the TSX Venture Exchange.
“Quattro intends to apply the proceeds from the
sale to a combination of liabilities including trade payables, and
a reduction in the term debt owing, with the balance of the
proceeds materially improving the Company’s working capital and
ability to continue to invest in its continuing operations in
western Canada,” said Leonard B. Van Betuw, President and CEO of
Quattro. “As a result of the material equity holdings that Quattro
will receive in the purchaser’s company, Quattro will be taking a
pro-active approach to assisting with the purchaser’s seamless
transition to becoming operator of the assets and the execution of
ongoing development plans.”
Upon the closing of the sale, Quattro estimates
the average production for the Company will be approximately 1,200
barrels per day on an annualized basis in 2016, and retain the
potential to grow to the Company’s initial objective of more than
3,000 boe per day in a short period of time following the closing
of the sale.
Summary of the Sale
Production: |
|
|
|
700 boe per day with extensive operated
facilities, $32,150 per boe/d on a PDP basis |
Reserves: |
|
|
|
2.68 mmbbls estimated reserves on a total proven
basis** |
Facilities: |
|
|
|
Current and maintained, with excess
capacity. |
Land: |
|
|
|
212,997 (gross) acres and 147,576 (net)
acres. |
Additional Potential: |
|
|
|
(i) optimization, (ii) work-overs and (iii) 10
seismically defined drilling locations. |
**1P reserves are estimates based on the review
of 3rd party engineering provided by the seller.
About Quattro Exploration and Production
Ltd.
Quattro Exploration and Production Ltd. (“QXP”)
continues to focus on the conventional exploration and development
of oil and natural gas reserves in Western Canada, with an
expanding presence in Alberta and BC. Our core low risk
production base will provide us the capacity to aggressively pursue
a series of high impact exploration and development efforts in
Central and South America. The company intends to balance
this portfolio of activities to assure its shareholders that it
achieves material growth in both reserves and production.
This release includes certain statements that
may be deemed “forward-looking statements”. All statements in this
release, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities and events or developments that the Company
expects are forward-looking statements. Although the Company
believes the expectations expressed in such forward looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward looking statements
include market prices, exploitation and exploration successes,
continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned
that any such statements are not guarantees of future performance
and those actual results or developments may differ materially from
those projected in the forward-looking statements. For more
information on the Company, Investors should review the Company’s
registered filings which are available at www.sedar.com.
This news release shall not constitute an offer
to sell or the solicitation of any offer to buy, nor shall there be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The securities
offered have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or applicable exemption
from the registration requirements of the U.S. Securities Act and
applicable state securities laws.
BOE presentation:
Barrel ("bbl") of oil equivalent ("boe") amounts
may be misleading particularly if used in isolation. All boe
conversions in this report are calculated using a conversion of six
thousand cubic feet of natural gas to one equivalent barrel of oil
(6 mcf=1 bbl) and is based on an energy conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the well head.
Trading in the securities of Quattro Exploration
& Production Ltd. should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services
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 PLEASE CONTACT:
Leonard Van Betuw
President and Chief Executive Officer
Office (403) 984-3917 Ext.102
Direct Line (587) 228-7070
leonard@qxp-petro.com
Or
Tianda Dranchuk
Business Development
Office (403) 984-3917 Ext.107
tianda.d@qxp-petro.com
www.qxp-petro.com