Illinois Basin Shallow Well Program Update
Raises A$1.108 Million in Private Placement
DENVER, COLORADO USA, BRISBANE, QUEENSLAND AUSTRALIA and VANCOUVER, BRITISH COLUMBIA CANADA - December 7, 2014 (Pacific Time - Canada)
Strata-X Energy Ltd. (“Strata-X” or the “Company”) (TSX-V:SXE) (ASX:SXA)is pleased to announce that it has successfully raised A$1.108 million through a private placement in addition to the A$500,000 raised through convertible notes from directors of the Company (as previously announced on 2 November 2014). Total gross proceeds from recent financings total approximately A$1.6 million.
Vertical Well Program
The Company expects to have a drilling rig on site at the Blue Spruce #1 well location by mid-December. The drilling contractor, Webster Drilling Inc., has notified Strata-X that it is next on the drilling schedule. The 3,800ft well, completed and equipped for production, is expected to cost approximately USD$300,000, with finding and development costs of less than $8/barrel (Prospective Resources). Production costs are estimated at less than $10 per barrel, with a resulting netback of over $44 per barrel at current crude prices.(1)
The Company has identified over 65 additional shallow vertical well opportunities on the current Strata-X leasehold, and has 3 drilling permits approved to date. The plan is to drill a second well immediately after the holiday season and approximately 1 to 2 wells per month thereafter beginning in February, subject to rig availability and access.
Burkett Production Update
The Company continues to carry out controlled production testing from the Company’s proof of concept horizontal well in the deeper Devonian Lingle formation. In November 2014, the Burkett 5-34 well averaged 180 BOE/D consisting of 130 bopd and 280 Mcf/d of high BTU gas. Gas analysis has shown that the gas contains significant amounts of ethane, propane and butane with a BTU content of 1,650 BTU, more than 60% higher than standard methane. The Company is exploring options to process the liquids rich gas to add a revenue stream that was not previously forecasted.
The Company was informed this week that it has been approved as a hydraulic fracturing operator under the newly approved State of Illinois fracture stimulation rules. Strata-X is the first company to receive this designation.
The Company also announces that it has closed the private placement as announced on November 12, 2014. The private placement (the “Placement”) consisted of 6,518,230 CDIs (representing 6,518,230 common shares) to raise A$1.108 million at a price of A$0.17 per CDI. The Placement represents approximately 4.45% of the Company’s issued capital (pre Placement). Quotation of the CDIs on the ASX will occur on Tuesday December 9, 2014 (Australian time). The Company paid finder’s fees in the amount of A$63,426 to certain finders.
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 850m to 1,110m.
- 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.
- Lease maintenance and general working capital purposes.
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 152,807,199 common shares outstanding and trades under the symbol “SXE” on the TSX-V and “SXA” on the ASX
For Further information 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|