Citadel Exploration Announces
Acquisition of Kern Bluff Oil Field for
$2,000,000 and Six Million Shares of Common Stock.
Newport Beach, CA -- August 4, 2015 -- InvestorsHub
NewsWire -- Citadel Exploration, Inc. (OTCQB:
COIL) (Citadel or the Company), a pure-play California oil
company with operations in the San Joaquin Basin of California,
announced today that it has acquired Kern Bluff Oil Field, which
was discovered in 1947. The asset acquisition includes
approximately 1,100 acres, production facilities, one well
producing approximately 8 barrels of oil per day, and over 20 idle
wells. Citadel believes a majority of the idle wells provide
workover and recompletion opportunities in bypassed oil zones, and
anticipates returning a portion of those wells to production in
approximately the next 30 days.
The Kern Bluff Oil Field has three oil zones starting at 1,100
in depth and going as shallow as 500. The three zones are the Santa
Margarita, Transition and Chanac. Each of these zones has over 100
wells that have penetrated and logged oil saturated sands of at
least 100 feet. Given the extent and breadth of well control data,
Citadel has identified as many as 60 new vertical well locations
and more than 30 horizontal well locations. The oil is
approximately 15.5 degree API and, because of its viscosity, will
require cyclic steam injection following 12-18 months of flush
production. The field is estimated to hold over 60 million barrels
of original oil in place (OOIP) and has recovered 12 million
barrels from 169 wells that were drilled primarily in the 1970s and
1980s. This equates to approximately 20% of the OOIP being
produced. Analogous fields in the surrounding area, including Kern
River, Round Mountain, Edison and Mountain View have recovered over
40% of the OOIP, and in the case of the nearest field, Kern River
up to 90% of the OOIP. This indicates that there are over 48
million barrels of OOIP left at Kern Bluff Oil Field for Citadel to
exploit. Most importantly, there hasnt been a new well drilled on
the property since 1996, and most of the idle wells have not
produced for more than 15 years.
"Kern Bluff Oilfield has a long and well-documented history
which we studied thoroughly before engaging in this transaction.
Our analysis of the geology, engineering and production has
confirmed significant recoverable oil on the lands we acquired,
said Armen Nahabedian, CEO of Citadel Exploration. This project
will give us an opportunity to modernize an aging oilfield using
cleaner and safer technology and techniques than the industry of
years past. Citadel takes great pride in its constant effort to
improve shareholder value while maintaining the highest levels of
operational safety and care for the environment, he added.
The transaction was financed via a $3,000,0000 one-year term
loan from private equity firm Cibolo Creek Partners, LLC (Cibolo)
of Midland Texas. Cibolo is also one of Citadels largest common
stock shareholders. Cibolo expects to convert this loan into equity
in the next 90 days as Citadel secures additional debt and/or
equity financing to develop Kern Bluff Oil Field.
Citadel is also pleased to announce that Mr. James Walesa, one
of Citadels current Board of Directors and a managing member of
Cibolo, has been appointed Chairman of the Board replacing Dan
Szymanski as Chairman. Mr. Szymanski will remain a member of
Citadels Board of Directors. Citadel thanks Mr. Szymanski for his
leadership as Chairman for the past four years, and looks forward
to his continued involvement.
We believe Citadel represents a unique investment opportunity
within the oil patch, and in particular as it relates to
California, said Mr. Walesa. The team at Citadel worked diligently
to identify and close the Kern Bluff Oil Field acquisition, and it
is our belief this asset gives the Company a core asset from which
to aggressively grow oil production and increase shareholder value.
Given the current low commodity price environment, it is Cibolos
core belief to be an acquirer during the downturn to capitalize on
higher prices once the cycle turns, which it always has in our 30
years of investing in the sector, he added.
Citadel looks forward to updating the investment community in
the months ahead as it begins to return idle wells to production
and drill new vertical and horizontal wells.
About Citadel Exploration, Inc.:
Citadel Exploration (OTCQB:
COIL) is a pure-play California oil company with operations in
the San Joaquin Basin of California. Citadel has a broad portfolio
of capital investment opportunities arising from managements
extensive knowledge of the geology and the history of oil and gas
exploration and development in California.
Citadel currently is focusing its efforts on two primary
prospects: The recently acquired Kern Bluff Oil Field and the
3,000-acre Yowlumne Project located in the Southern San Joaquin
Basin of Kern County.
Citadel prides itself on its legacy of discovery and innovation
in the industry, and is committed to a plan of careful, deliberate
growth tempering risk by focusing on historically successful
projects. The best place to find oil is where it has already
been found.
Company Contact:
Phil McPherson CFO
949-612-8040