Strata-X Updates Illinois Basin and Announces Private Placement
DENVER, COLORADO USA, BRISBANE, QUEENSLAND AUSTRALIA and VANCOUVER, BRITISH COLUMBIA CANADA - November 12, 2014 (Pacific Time - Canada)
The directors and management of Strata-X Energy Ltd. (“Strata-X” or the “Company”) (TSX-V:SXE) (ASX:SXA) are pleased to provide an updated presentation on our 100% owned Illinois Basin projects which can be found on the Company’s website at www.strata-x.com. The update incorporates the recently announced oil flow rate from the first 'proof of concept' lateral, multi-stage, stimulated well in the Burkett Oil Field reaching 310 BOPD. Although this current flow rate exceeds that required for commercial production, it is still too early to determine the peak production rate or the ultimate recovery for this well. There are also no assurances that the well will continue to produce at this rate, or at all, in the future. Strata-X has third-party verified, unrisked, undiscovered 338 Million barrels OOIP net to the Company’s interest in the Devonian target formations.(1, 2) Undiscovered resources are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered. 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.
The updated Illinois Basin presentation also outlines Strata-X's low risk, low cost, shallow vertical drilling program which targets high margin oil within multiple bypassed and/or untested reservoirs. Drilling of the first well is scheduled to commence in early December, subject to completion of the private placement described below.
ASX Private Placement
The Company is also pleased to announce a non-brokered private placement to sophisticated and institutional investors of up to 21.7 million Chess Depository Interests (“CDIs”) in the Company at a price of AUD$0.17 per CDI for gross proceeds of up to approximately AUD$3.7 million (the “Placement”). It is anticipated that the Placement will close on Friday, November 21, subject to receipt of necessary regulatory approvals, including the approval of the TSX Venture Exchange and Australian Securities Exchange. The CDIs will be subject to resale restrictions in Canada for a period of four months and one day from the date of issuance.
The Company intends to use the proceeds from the Placement as follows:
- Drilling, stimulating, if required, and testing up to five low cost vertical wells in the Illinois Basin projects targeting bypassed and/or untested high margin light sweet oil within multiple shallow reservoirs at depths of 750m to 1110m.
- Continued long term testing of the first ‘proof of concept’ well in the Burkett Oil Field to estimate production declines required for economic modeling of the field.
- Flow testing the first ‘proof of concept’ well on the Sleeping Giant Gas Project which has 25 metres of interpreted gas pay. Strata-X has third party verified, unrisked, undiscovered 398 BCF PIIP net to the Company’s interest in this project.(1) Undiscovered resources are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered. 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.
- Lease maintenance and general working capital purposes.
Each Placement CDI will represent one common share of Strata-X and will rank equally with existing CDIs. All CDIs issued pursuant to the Placement are to be fully tradable and listed on the Australian Securities Exchange, subject to the necessary approvals by the TSX-V and ASX, respectively.
The Placement will be completed in accordance with the Company’s placement capacity pursuant to the ASX Listing Rules. The proceeds from the Placement may be insufficient to accomplish all of these efforts, and the Company may require additional funding from other sources. Strata-X may, subject to regulatory approval, pay a finder’s fee in respect of the Placement.
The Company has determined to cancel its previously proposed offering of up to 50,000,000 common shares to be distributed under a short form prospectus, as announced on October 28, 2014. No securities were distributed under the prospectus.
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, Texas, Illinois and Western Australia and production and development opportunities in California. Strata-X has 146,288,969 common shares outstanding and trades under the symbol “SXE” on the TSX-V and “SXA” on the ASX.
For further information please contact:
|Tim Hoops (USA)||or||Colin Christensen (Canada)||or||Julia Maguire (Australia)
|President||Investor Relations||Investor Relations|
|+1 855-463-2400||+1 403-483-8363||+61 419 815 386|