Strategic Oil & Gas Ltd. Provides Operations Update
June 17 2014 - 8:30AM
Marketwired
Strategic Oil & Gas Ltd. Provides Operations Update
CALGARY, ALBERTA--(Marketwired - Jun 17, 2014) - Strategic Oil
& Gas Ltd. ("Strategic" or the "Company") (TSX-VENTURE:SOG) is
pleased to provide the following operations update.
MUSKEG STACK UPDATE
The Company's latest Muskeg Stack well (10-24) was drilled in
March 2014 with 1,438 metres of horizontal section and a 15 stage
completion program. The well has been tied in and producing for 52
days with initial rates well over the Company's Muskeg type curve.
Initial rates for the Muskeg Stack well 10-24 are: IP30: 560 boe/d
and IP52: 509 boe/d. The well has produced approximately 26,500 boe
(60% oil) in less than two months.
The Company has initiated its summer drilling program in the
Marlowe core area, spudding the first well 11-24 last week and
intends to drill a total of 5-6 Muskeg Stack horizontal wells prior
to the end of the year as a part of its 2014 capital program.
NON-CORE DISPOSITION
Strategic has closed a disposition of non-core assets located in
the Garrington area of central Alberta for a purchase price of
$3.55 million. The assets, which are all non-operated, are
comprised of 1.9 net sections of land and production of
approximately 90 boe/d (94% natural gas and associated liquids).
The annual cash flow from operations in the area is approximately
$0.45 million. The purchase price of $3.55 million represents 8
times cash flow and $40,000 per flowing boe of production.
PRODUCTION
The Steen River plant and the sales oil pipeline are up and
running. Field estimated average for April production is 3,800
boe/d. As a result of the non-core asset disposition of 90 boe/day
as well as the 9,000 barrels of oil production at Marlowe used to
fill the Bistcho sales oil pipeline, sales volumes are estimated to
be 3,600 boe/d for the second quarter of 2014.
The Company is seeing a significant reduction in both operating
and transportation costs in its core asset at Marlowe during the
second quarter of 2014. As a result, the Company anticipates a
decrease of $10-12/boe in corporate transportation and operating
costs compared to the first quarter of 2014.
Current production subsequent to the asset disposition is
estimated at 3,800 boe/d. Strategic is encouraged by the latest
Muskeg well results at Marlowe and believes the summer drilling
program will further increase production volumes in the second half
of the year. The Company anticipates exiting 2014 with production
of 4,000 boe/d.
ABOUT STRATEGIC
Strategic is a junior oil and gas company committed to growth by
exploiting its light oil assets in Canada. Strategic's common
shares trade on the TSX Venture Exchange under the symbol SOG.
ADDITIONAL INFORMATION
Additional information, including the Company's recently updated
corporate presentation, is also available at www.sogoil.com and at
www.sedar.com.
Reader Advisories
Any references in this news release to initial flow-back or
production test rates are useful in confirming the presence of
hydrocarbons, however, such rates are not necessarily determinative
of the rates at which such wells will commence production. These
flow-back or test results may not be indicative of long-term well
performance or ultimate recovery. While encouraging, readers are
cautioned not to place reliance on such rates in estimating the
aggregate production for the Company.
Forward-Looking Statements
This news release includes certain information, with
management's assessment of Strategic's future plans and operations,
and contains forward-looking statements which may include some or
all of the following: (i) anticipated production rates; (ii)
production from new wells; and (iii) the Company's competitiveness
relative to industry peers; which are provided to allow investors
to better understand the Company's business. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties; some of which are beyond Strategic's control,
including the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency fluctuations,
imprecision of reserve estimates, environmental risks, changes in
environmental tax and royalty legislation, competition from other
industry participants, the lack of availability of qualified
personnel or management, stock market volatility and ability to
access sufficient capital from internal and external sources, and
other risks and uncertainties described under the heading 'Risk
Factors' and elsewhere in the Company's Annual Information Form for
the year ended December 31, 2013 and other documents filed with
Canadian provincial securities authorities and are available to the
public at www.sedar.com. Readers are cautioned that the assumptions
used in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise
and, as such, undue reliance should not be placed on
forward-looking statements. The principal assumptions Strategic has
made includes security of land interests; drilling cost stability;
royalty rate stability; oil and gas prices to remain in their
current range; finance and debt markets continuing to be receptive
to financing the Company and industry standard rates of geologic
and operational success. Actual results could differ materially
from those expressed in, or implied by, these forward-looking
statements. Strategic disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Basis of Presentation
This discussion and analysis of Strategic's oil and natural gas
production and related performance measures is presented on a
working-interest, before royalties basis. For the purpose of
calculating unit information, the Company's production and reserves
are reported in barrels of oil equivalent (Boe) and Boe per day
(Boed). Boe may be misleading, particularly if used in isolation. A
Boe conversion ratio for natural gas of 6 Mcf: 1 Boe has been used,
which is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not necessarily represent a
value equivalency at the wellhead. As the value ratio between
natural gas and crude oil based on the current prices of natural
gas and crude oil is significantly different from the energy
equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
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.
Strategic Oil & Gas Ltd.Gurpreet Sawhney, MBA, MSc.,
PEng.President and CEO403.767.2949403.767.9122Strategic Oil &
Gas Ltd.Aaron Thompson, CAChief Financial
Officer403.767.2952403.767.9122www.sogoil.com
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