Quattro Agrees to Purchase 444,300 BOE of Oil, Natural Gas and Liquids for $1,944,180
November 04 2015 - 8:07PM
Quattro Exploration And Production Ltd. (TSXV:QXP)
("
Quattro" or the "
Company") is
pleased to announce that it has signed a binding agreement to
purchase oil and gas production, facilities and lands in British
Columbia from an Alberta-based private oil and gas exploration and
production company (the "
Acquisition").
The purchase price for the acquisition is $1,944,180, to be paid
through the issuance of 10,625 non-voting, Class C, series 2
preferred shares at a deemed price of $100 per share
("Preferred Shares") and $881,680 in cash, to be
paid from working capital assumed by Quattro in the acquisitions.
The properties are located in northeast British Columbia,
geologically trending complementary to Quattro's current
exploration and production in the Company's core region (the
"Properties"). Closing of the purchase of the
Properties is scheduled for November 15, 2015, with an effective
date of November 1, 2015, 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.
The Preferred Shares are priced at $100 per share and pay an
annual preferred dividend of $3.50 per share. The holder will have
the right on the anniversary of the 2nd year of issuance to convert
the Preferred Shares into Class A common shares at a ratio of 40
Class A shares for each Preferred Share converted, valuing the
Quattro Class A common shares received at a deemed price $2.50 per
share.
The Acquisition includes the transfer of working capital in the
form of cash deposits, a 100% interest in 102 boe/d of production
(currently shut-in due to government restrictions being imposed on
the seller that will be resolved as a condition of closing) and
developed and undeveloped land totaling 13,064 (net) acres
prospective in the Halfway and Baldonnel formations. The
reactivation of production included in this Acquisition was
previously producing at an average rate of approximately 102 boe/d
(net), a combination of 550 mcf/d of natural gas and 10 barrels per
day of condensate.
"The acquisition of this production, at a discount to current
oil and natural gas pricing, and the additional prospective lands,
is another incremental step in our business plan of being regional
focused while continually improving on Quattro's economies scale in
its core regions. Upon closing, this acquisition represents a
production and reserves increase of more of 5% year-over-year at a
cost of $12,300 per boe/d and $2.80 per boe of reserves on a 2P
basis. Clearly this is an accretive addition to reaching our near
term goals in northeast British Columbia." said Leonard Van Betuw,
President and CEO.
Through the Acquisition, Quattro is acquiring a high working
interest in low-decline production and an additional 10,552 acres
(net) of undeveloped land prospective in the Halfway and Baldonnel
that is complementary to our current operations. In northeast
British Columbia, Quattro continues to explore and produce,
targeting conventional plays in the Halfway, Doig, Bluesky,
Dunlevy, Charlie Lake, Slave Point, Keg River and competitive low
cost, innovative resource opportunities in the Montney, Muskwa and
Otter Park formations.
Leonard Van Betuw, President of the Company, further commented,
"The business plan remains the same. The execution of exploration,
production and acquisitions in a robust order continues to position
the Company to execute on its diversified approach to developing
accretive low-risk cash-flowing operations in its three Core
Regions of the Western Canadian Basin. This, in turn, funds the
Company's longer term goals of high impact exploration and resource
development as a profitable domestic and international integrated
oil and gas producer."
Summary of the
Acquisition |
Production: |
102 BOE per day, of long life natural gas and
liquids at a cost of $12,300 per boe/d |
Reserves: |
444,333 boe of estimated reserves based on a
proven plus probable basis** |
Purchase Price: |
$2.82 per BOE of Proven plus Probable
Reserves. ** |
Facilities: |
Current and maintained, with excess
capacity. |
Land: |
13,064 acres; 2,512 developed and 10,552
undeveloped, valued at $837,600. |
Additional Potential: |
(i) optimization, (ii) work-overs and (iii)
seismically defined, undeveloped potential |
**2P reserves are estimates based on the review of 3rd party
Engineering provided by the seller, and internally verified by
Quattro during its Due Diligence process.
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.
www.qxp-petro.com
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.
CONTACT: 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