Strata-X Releases Copper Mountain Oil Project Resource Report
- Issued Prospective Resource Report on Strata-X's recent
acquisition of Copper Mountain Oil Project in the Illinois
Basin.
- Confirms managements understanding of the high
prospectivity.
- The Company is planning a long term production test to
commence later this month of a horizontal well drilled and
completed in the Copper Mountain Oil Project in 2013 by the
previous operator that produced light oil.
DENVER, COLORADO and BRISBANE, QUEENSLAND and VANCOUVER, BRITISH
COLUMBIA--(Marketwired - May 7, 2014) - The directors and
management of Strata-X Energy Ltd. ("Strata-X" or the "Company")
(TSX-VENTURE:SXE)(ASX:SXA) are pleased to announce that Chapman
Petroleum Engineering Ltd ("Chapman"), the Company's third party
engineering evaluator, has issued a Prospective Resource report
("Report") for the Copper Mountain Oil Project ("Project").(1)
The Report provides a Best Estimate Prospective Resource, net to
the Company's interest, in the Project of 12,837,000 barrels of
oil, with an un-risked value of approximately $320 million and a
risked value of approximately $75 million (collectively when using
a 10% discounted rate).(1) ASX disclosure note - 5.28.2 - The
estimated quantities of petroleum that may potentially be recovered
by the application of a future development project(s) relate to
undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration
appraisal and evaluation is required to determine the existence of
a significant quantity of potentially moveable hydrocarbons.
The Company commissioned the Report to obtain a formal estimate
of Prospective Resources in the targeted Middle Devonian aged Grand
Tower and Lingle Formations of the Project. The Grand Tower is
directly beneath the Lingle Formation (target interval for the Vail
Oil Project). The Lingle and Grand Tower make up the Middle
Devonian age formation in this portion of the Illinois Basin. In
the Report, Chapman estimated that there is a total of 128 million
barrels of Petroleum Initially in Place ("PIIP", unrisked,
undiscovered) net to the Company's economic interest in the Middle
Devonian formations.(1) Chapman arrived at this PIIP figure after
completing an analysis of the available technical data including
the geological and geophysical interpretation presented to them by
Strata-X, information from relevant nearby wells or analogous
reservoirs and the proposed program for the project. The Report
reviewed only Prospective Resources as the Project is not
sufficiently developed to assign Contingent Resources or Petroleum
Reserves to the Project.(1)
The Report encompasses approximately 20,146 net acres in one of
three counties the Company is working in the Illinois Basin. The
report was conducted in accordance with National Instrument 51-101,
Sec 59 of the Canadian Securities Administrators and is compliant
with the internationally accepted Petroleum Resource Management
System standard. Not included in the Report are estimates of the
resource potential of the historically targeted shallower zones of
the Mississippian formation. Resource estimates of the
Mississippian formations covering the Project are forthcoming.
Acquisition
Background
In April 2014, Strata-X purchased 23,595 net acres of production
and exploration assets in the Illinois Basin adjacent to its
existing Vail Oil Project. The acquisition, known as the Copper
Mountain Oil Project, is prospective for conventional and
unconventional light oil accumulations in shallow Mississippian age
formations (from 700 metres depth) as well as the deeper Middle
Devonian age formation (~1200 to 1600 metres depth). Total
consideration paid to the un-disclosed seller of the project was
USD$2.25 million. Included in the Project acquisition is the
Blessing 1-4H horizontal well drilled by the prior operator in mid
2013. This well produced light oil from the Grand Tower Formation
and is currently shut in awaiting production equipment. The Company
is nearing completion of a water disposal flow line with the plan
to carry out a long term production test of the well.
Illinois Basin
Summary
The Company's flagship oil projects are in the proven and mature
Illinois Basin where production dates back to 1894 with over 4
billion barrels of oil produced to date (Higley, et al., 2001).
Over 140,000 wells have been drilled, with about 32,000 wells still
producing in the basin where 600+ oil fields produced approximately
13 million barrels in 2013 (US-EIA Crude Oil Statistics). The basin
produces a high quality, light, sweet crude oil in multiple
conventional shallow structural traps. The basin has ideally
located close to production infrastructure including refineries and
pipelines nearby and a well services industry.
Recent mapping, drilling and testing of prospective zones
demonstrates significant unconventional and light oil potential.
The Company believes integrated data analysis combined with new
drilling and completion technologies are key to unlocking the
basins additional potential. The Company has 100% interest in
approximately 72,000 net acres with multiple target zones from
shallow vertical depths of between 700 - 1,600 meters.
President and Managing Director, Tim Hoops, stated: "This Report
establishing a Prospective Resource for the Project at 12.8 million
barrels of oil net to the Company provides a substantial increase
in the Prospective Resources we previously held in the Illinois
Basin of 19 million barrels in the Vail Oil Project.(2) In our
opinion, this large Prospective Resource base reduces the overall
risk the Company faces as we expand the number of oil rich
formations we are prospecting in."
For a summary of the Report and additional details on this
Project, please see the Copper Mountain Oil Project Presentation on
the Company's website at www.strata-x.com.
(1) Resource information cited in this News Release for the
Copper Mountain Oil Project are Prospective Resources, per an
independent third party report effective 1 April 2014 ("Report")
from Chapman Petroleum Engineering Ltd. ("Chapman") who's author,
Charles Moore, a registered Professional Engineer in the Province
of Alberta, Canada, consents to the inclusion of this resource
information in this Presentation as it appears and information
relating to the Prospective Resource is based on, and fairly
represents, information and supporting documentation prepared by
Charles Moore. There is no certainty that stated resources will be
commercially viable to produce any portion of the resources. The
Report reviewed only Prospective Resources as the project is not
sufficiently developed to assign Contingent Resources or Petroleum
Reserves to it, further, all Petroleum Initially in Place figures
relate to undiscovered quantities. Figures shown reflect Strata-X's
economic interest (US Dollars) net of royalty or other burdens and
were generated, using the deterministic method. Forecasted figures
were derived using forward commodity strip pricing, regional
drilling, completion and production expenditures and applicable
production taxes. Strata-X is the title holder of the
tenement/leases held covering the Copper Mountain Oil Project which
were subject to the Report. The Report reviewed approximately 800
tenements/leases held by the Company with individual owners
covering 20,146 net acres with each tenement/lease having a range
of expiration dates, royalties and other provisions. Prospective
Resources were determined in the Report after Chapman completed an
analysis of the available technical data including the geological
and geophysical interpretation presented to them by Strata-X,
information from relevant nearby wells or analogous reservoirs and
the proposed program for the project. Chapman estimated a
Probability of Commercial Success of 25% associated with the
reported Prospective Reserves with a 33% chance of discovery and
calculated the net capital exposure of this project to the Company
of $5,625,000, representing the cost of drilling, completing,
testing and abandoning three dry holes which exploration timing is
not yet known. In establishing the Probability of Success, Chapman
gave consideration to both geological and commerciality factors.
The geological factors include the four main geological components
of a petroleum system needed for commercial production, source
rocks available to generate hydrocarbons, reservoir rocks to
accumulate hydrocarbons, a stratigraphic or structural trapping
mechanism with a seal to hold hydrocarbons and a mechanism and
proper geological timing allowing for hydrocarbons to migrate into
the trap.
The estimated quantities of petroleum that may potentially be
recovered by the application of a future development project(s)
relate to undiscovered accumulations. These estimates have both an
associated risk of discovery and a risk of development. Further
exploration appraisal and evaluation is required to determine the
existence of a significant quantity of potentially moveable
hydrocarbons.
(2) This information relates to Petroleum Reserves/Prospective
Resources/Contingent Resources that was prepared and published by
AWT International dated 18 December 2012 and published in Strata-X
Energy Ltd's "Prospectus 2013" (available online at
www.strata-x.com) as part of the Companies 2013 Australia
Securities Exchange Initial Public Offering and is based on, and
fairly represents, information and supporting documentation
prepared by, or under the supervision of Doug Barrenger ("JORC
Competent Person"), employed by AWT International and is
independent of Strata-X Energy Ltd. At the time of the Prospectus
2013 issuance, Doug Barrenger was an employee of AWT International
and a member of the Exploration Society of Australia (PESA) amongst
other professional petroleum organisations. AWT International
consents to the inclusion of this information in this document. As
of the issuance of this document Strata-X Energy Ltd management is
not aware of any material information that would change the results
of the AWT International report as published in the Prospectus
2013.
About Strata-X
Strata-X is a Denver, Colorado (USA) based company and is
engaged in the business of oil and gas exploration and development
with a variety of exploration opportunities in North Dakota,
California, Colorado, Texas, Illinois and Western Australia and
production and development opportunities in California. Strata-X
has 139,785,415 common shares outstanding and trades under the
symbol "SXE" on the TSX-V and "SXA" on the ASX.
This announcement was made in Canada for the TSX.V and in
Australia for the ASX.
Public documents for Strata-X Energy Ltd. can be found at
SEDAR (Canada) (www.sedar.com) and ASX.com.au (Australia).
By definition of the COGE Handbook - "Undiscovered resources
are those quantities of oil and gas estimated on a given date to be
contained in accumulations yet to be discovered." The Handbook
further states - Caution (per NI 51-101/5.9(2)(v)(B)) - "There is
no certainty that any portion of the resources will be discovered.
If discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources." In addition, per
NI 51-101/5.6 "the estimated values disclosed do not represent fair
market value."
CAUTIONARY STATEMENTS
This news release contains forward-looking statements, which
relate to future events or future performance and reflect
management's current expectations and assumptions. The use of any
of the words "anticipate", "continue", "estimate", "expect", 'may",
"will", "project", "should", 'believe", and similar expressions is
intended to identify forward-looking statements. Such
forward-looking statements reflect management's current beliefs and
are based on assumptions made by and information currently
available to the Company. Readers are cautioned that these
forward-looking statements are neither promises nor guarantees, and
are subject to risks and uncertainties that may cause future
results to differ materially from those expected and the
forward-looking statements included in this news release should not
be unduly relied upon. See "Risks and Uncertainties" in the
Company's Filing Statement dated August 30, 2011 available on SEDAR
at www.sedar.com. These forward-looking statements are made as of
the date hereof and the Company does not assume any obligation to
update or revise them to reflect new events or circumstances save
as required under applicable securities legislation. This news
release does not constitute an offer to sell securities and the
Company is not soliciting an offer to buy securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
Neither 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.
Strata-X Energy Ltd.Tim Hoops (USA)President+1
855-463-2400info@strata-x.comStrata-X Energy Ltd.Colin Christensen
(Canada)Investor Relations+1 403-483-8363colin@strata-x.comStrata-X
Energy Ltd.Duncan Cornish (Australia)Corporate Secretary+61 7
3212-6299dcornish@strata-x.comwww.strata-x.com
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