Company Acquires Working Interest In 12,850 Gross
Acres in 4 Oil Fields in Three Proven Basins and Commits Capital to
Materially Expand Production
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CALGARY, Sept. 4, 2018 /CNW/ - Petro-Victory Energy Corp.
(TSX-V: VRY), ("Petro-Victory" or the "Company"), an acquirer and
developer of oil and gas assets, is pleased to announce a US
$1.6 million acquisition of
production and working interests in 4 oil fields, comprised of
12,850 gross acres, located within three developed onshore basins
in Brazil, and commits capital to
materially expand production. The acquisition was financed using
the company's existing US $10.0
million credit facility.
Highlights
- US $1.6 million acquisition cost
(US $125 per acre). US $0.375 million paid at signing, US $1.225 million paid upon Agencia Nacional do
Petroleo Gas Natural e Biocombustiveis of Brazil ("ANP") approval.
- Acquisition consists of:
-
- 100% operating interest in the Andorinha onshore producing oil
field in the Potiguar Basin
- 100% operating interest in the Alto Alegre onshore oil field in
the Potiguar Basin
- 50% non-operating interest in the Carapitanga producing onshore
oil field in the Sergipe-Alagoas Basin
- 50% non-operating interest in the São João onshore oil field
in the Barreirinhas Basin
- Existing infrastructure acquired includes 21 drilled wells,
pipelines, power generation and electrical lines, pumping units,
paved roads, storage tanks, 3D and 2D seismic with a combined
estimated cost of >US $50
million
- Seismic and well data will be used to construct a new
development plan. Initial work has indicated significant upside
opportunities.
- Potential for new wells to materially increase production.
Management estimates the 4 fields have the potential to achieve
>1,000 BOPD.
- Near term well recompletions estimated to increase net
production to >100 BOPD
- Q2 2018 average production of 20 BOPD from four mature wells in
the two producing fields, Andorinha and Carapitanga
- The company acquired the producing assets from Empresa de
Engenharia de Petróleo Ltda. ("ENGEPET") and has an operating
partnership with ENGEPET to optimize field production for
Carapitanga and Sao Joao fields.
- Transaction subject to approval from Agencia Nacional do
Petroleo Gas Natural e Biocombustiveis of Brazil ("ANP"). The Acquisition has been
conditionally approved by the TSX Venture Exchange (the "TSXV") but
is subject to final approval of the TSXV.
Richard Lane, Chief Operating
Officer of Petro-Victory said, "These fields are located in mature,
oil prone basins, with well understood geology and low geological
risk. Reservoirs are of excellent quality and our hydrocarbon pay
zones are at shallow depths (1-1.5km) allowing for low cost
development drilling. The fields produce excellent quality
light sweet crude with no impurities, meaning we can achieve a
higher price for crude sold".
Richard F. Gonzalez, Chief
Executive Officer of Petro-Victory said, "This acquisition
positions us in Brazil at a time
when onshore oil and gas investment is poised for revitalization.
The market opportunity in Brazil
has become more attractive with improvements in the economy as well
as a move higher in oil prices. We are excited as we leverage
long-term relationships within Brazil that present opportunities that fit
Petro-Victory's growth and returns focused strategy. Our
acquisition and expected capital costs will generate strong margins
and cash flows".
This press release does not constitute an offer to sell or the
solicitation of an 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 prior to registration or
qualification under the securities laws of such jurisdiction. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws and may not be
offered or sold within the United
States unless an exemption from such registration is
available.
Cautionary Note
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.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding Petro-Victory,
including management's assessment of Petro-Victory's future plans
and operations, certain statements in this press release are
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian securities legislation (collectively, "forward-looking
statements"). In some cases, forward-looking statements can be
identified by terminology such as "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "intend",
"may", "objective", "ongoing", "outlook", "potential", "project",
"plan", "should", "target", "would", "will" or similar words
suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, this press release contains forward-looking
statements relating to but not limited to: the offering, our
business strategies, oil and gas production, plans and objectives,
and drilling, testing and exploration expectations. These
forward-looking statements are based on certain key assumptions
regarding, among other things:, the completion of the offering; our
ability to add production and reserves through our exploration
activities; the receipt, in a timely manner, of regulatory and
other required approvals for our operating activities; the
availability and cost of labor and other industry services; the
continuance of existing and, in certain circumstances, proposed tax
and royalty regimes; and current industry conditions, laws and
regulations continuing in effect (or, where changes are proposed,
such changes being adopted as anticipated). Readers are cautioned
that such assumptions, although considered reasonable by
Petro-Victory at the time of preparation, may prove to be
incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. These and additional risk factors
are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities
regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Petro-Victory's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Petro-Victory that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Petro-Victory does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
Not for distribution to U.S. Newswire Services or for
dissemination in the United
States. Any failure to comply with this restriction may
constitute a violation of U.S. securities laws.
SOURCE Petro-Victory Energy Corp.