Quattro Announces $50 Million Capital Budget and $3 Million
Increase in Term Facility
CALGARY, ALBERTA--(Marketwired - Jun 30, 2014) - Quattro
Exploration and Production Ltd. ("Quattro" or the "Company")
(TSX-VENTURE:QXP) is pleased to announce the approval of its $50
million capital budget, including a 3 year drilling program, which
will commence in the 3rd Quarter of 2014 with Phase I being focused
on its operated lands in Western Canada.
"The approval of this budget by our Board of Directors is an
endorsement of the Quattro team's work and technical understanding
of the potential within the Company's diverse land base." said
Leonard Van Betuw, President and CEO. "We are now in the process of
licensing the first 24 (net) wells of a 55 (net) well drilling
program. These 24 wells are scheduled to be drilled in the next 12
months. We will also be continuing to increase production with our
remediation and recompletion program within our existing oil and
natural gas fields over the next 12 months, while drilling 23(net)
development wells, 15 targeting oil and 8 targeting natural gas. In
addition, we have budgeted 2 wells, 1(net) exploratory well within
our 110,000 acre permit (50% net) situated in the Williston Basin
of Saskatchewan. The first well is scheduled to be drilled in the
3rd quarter of 2014."
The Company anticipates that its development drilling efforts
combined with its ongoing remediation and consolidation activities
will carry Quattro's 2,500 boe/d exit target in 2014, up to 3,500
boe/d (net) in the 12 months ending June 30, 2015. The development
wells are all incremental activities within the Company's operated
properties and will be operated by Quattro. This positions Quattro
to quickly tie in new production at minimal cost. The allocations
of these activities are as follows, on a net/gross interest
basis;
2 / 2 Vertical Oil Wells at Oak BC. - targeting the Halfway with
in our current producing Pool
1 / 2 Horizontal Oil Wells in East Central Alberta - targeting
the Ellerslie within our current producing Pool
4 / 4 Oil Wells at Rangeview Saskatchewan - targeting the
Madison and Shaunavon
8 /40 Oil Wells at McMullen, Alberta - targeting the
Wabiskaw
8 /10 Vertical Natural Gas Wells at Donalda, Alberta - targeting
the Viking, Mannville and Belly River
23/60 Diversified between 16(net) oil and 8(net) natural gas
wells, Quattro's net cost being approximately $13.5 million.
The proposed wells are located within Quattro's existing lands,
operated by the Company where there is proven production and
established well performance. Therefore they have been deemed to be
low risk development wells, using proven drilling and completion
techniques with unrestricted access into our existing facilities.
The Phase I program is estimated to be completed at an average cost
of $18,000 per bopd for oil and $7,200 per boe/d for natural
gas.
1/2 Exploration Wells at Wood Mountain, Saskatchewan - Targeting
the Bakken, Birdbear and Duperow
The Exploratory well in the Williston Basin and continuing
exploration efforts are budgeted at $1.65 million and will be used
to further evaluate the un-booked potential currently identified in
southern Saskatchewan.
The balance of the budget totaling $35m has been allocated as
follows: $20 million in Western Canada in 2015-2016 with the
remaining $15 million in expenditures in Guatemala in the second
half of 2015 and 2016.
The capital budget will be funded from cash on hand and the
allocation of 70% of projected cash-flow from operations
anticipated in the next 30 months. Phase I of the budget is
supported by our trailing performance and engineering independently
reviewed in May 2014, by our lender prior to the approval and
funding of our updated fixed term loan.
The Company is also pleased to announce the negotiated increase
in our term loan facility with Business Development Bank of Canada
("BDC"). The current loan of $5.125 million was replaced with an $8
million term loan with the additional amount used to payout a
capital lease and the balance of $2.35m applied to working
capital.
"We are pleased with the outcome of our negotiations." commented
Leonard Van Betuw, "The prompt response from BDC is a strong
endorsement of our past performance and our continuing operations.
They continue to recognize our measured and continuing approach to
operating within our cash-flow, while maintaining a conservative
estimate of future pricing of oil and natural gas for long term
planning. The new term loan represents a reduction in our interest
rate to a fixed rate of 6.55% with fixed payment terms for both
interest and principle that are less than $2.00 per boe at yearend
2014 and becoming less than $1.50 per boe by year end 2015. BDC's
prompt attention to our request and their appreciation to the
detail of our business plan speaks for itself."
The Company's budget and projections are based on the pricing of
$4.25 per mcf for natural gas and a blended oil price of $80 per
barrel for Western Select. These prices result in a blended
commodity price for the Corporation of $42.50 per boe, which is
projected to grow to $55 per boe by the end of 2015.
This announcement of Quattro's development drilling activities,
which have been in the planning stages for the past 12 months,
further expands on the details disclosed in in our projections and
the anticipated expansion of Quattro's operating netbacks from
$18.75/boe in the 1st quarter of 2014 to approximately $25/boe by
the 4th quarter of 2015. The drilling of 24 (net) wells to increase
oil production, and the incremental reduction in operating
expenses, while continuing, remediation, re-activations and
consolidation are budgeted to be achieved without any reduction in
our long term budget for engineering and business development in
Western Canada and Guatemala.
Quattro continues to diligently strengthen the foundation of the
Company, as summarized in our operations and projections outlined
in our 3 year organic plan, to achieve a rate of 6,000 boe/d by
year-end 2016.
For further information we encourage investors to visit our
Website, www.qxp-petro.com to review our current Corporate
Presentation for details.
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 British Columbia. It's core low risk production base
will provide the Company the capacity to aggressively pursue a
series of high impact exploration and development efforts in
Central and South America. Quattro 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 and 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.
Quattro Exploration and Production Ltd.Leonard Van
BetuwPresident and Chief Executive OfficerOffice (403) 984-3917 or
Direct Line (587)
228-7070leonard@qxp-petro.comwww.qxp-petro.com