Strata-X Reports Year End Reserve Increases
DENVER, COLORADO USA, BRISBANE, QUEENSLAND AUSTRALIA and VANCOUVER, BRITISH COLUMBIA CANADA - September 15, 2015 (Pacific Time - Canada) (TSX-V:SXE) (ASX:SXA)
- Proven reserves increased 96% to 184,000 barrels of oil (net).1
- 2P reserves increased to 1.55 million barrels of oil (net).1
- Lingle Project Prospective Resource of 12.1 million bbls of oil (net to company interest).1
Strata-X has reported its June 30, 2015 fiscal year-end reserve and resource estimates as determined by its independent reserve evaluators, Chapman Petroleum Engineering, Ltd. Total reserve estimates are 1.55 million barrels of oil, an increase of 1.3 million barrels from the 2014 fiscal year end report (net to company interest).1 Total resource estimate for the Company is 12.1 million barrels (net to company interest).1 The estimates are compliant to COEGH standards as required by the Canadian reporting standards.
Proved and Probable Reserves
The net present value of the proved and probable reserves (2P), discounted at 10% is estimated (unrisked, before tax) to be US$57 million dollars (C$81.4 million) an increase of US$46.3 million (C$66.2 million).1 This represents a value of approximately 40 cents per share (Canadian). The 2P reserves assigned to the Blue Spruce project account for the majority of the 2P reserve increase. As previously announced, the Blue Spruce field is an enhanced oil recovery project that will utilize waterflooding techniques to extract the forecasted reserves.
The report’s Prospective Resources estimate of 12.1 million barrels (net) of oil is associated with the Company’s Lingle Project in Southern Illinois.1 The estimated net present value (best estimate, net to Company interest, unrisked, before tax) of these resources is approximately US$284 million (C$405 million).1 ASX disclosure note - 5.28.2 - The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations.
These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially recoverable hydrocarbons. The estimated NPV of these reserves and resources uses a forward strip model that the independent engineers use for both oil pricing and lease operating expenses. Further information on the reserve report data can be found on the Company’s website.
The Lingle Project has been successfully tested with the first horizontal well, the Burkett 5-34, reaching peak production of 300 BOPD. The Company is currently drilling the Kuhlig #1 well which will test the Lingle formation in a cored vertical well approximately 12 km from the initial Burkett 5-34 horizontal test. It is anticipated, subject to financing, that the second horizontal well in the project, the Raccoon Creek #1 is being planned to be drilled in the first quarter of calendar 2016.
The Company President and Managing Director, Mr. Tim Hoops, stated: “Despite the downward pressure on the industry due to the lower price of oil, we are pleased that we have been able to build upon our underlying assets. We have had to trim some of our fringe acreage with our austerity moves but feel we are still well positioned to advance our Illinois program. A significant benefit of operating in Illinois and having a first mover advantage is that we have superior margins compared to other developing plays. On average, our royalties of 15.5% and our finding and development cost are less than $25 barrel.”
The Company announces that it has filed its Audited Consolidated Financial Statements, Annual Report of Reserves, TSX MD&A, ASX 2015 Annual Report and its Annual Information Filing for the year ended June 30, 2015. Copies of the filed documents are available on SEDAR, the ASX and the Company’s website.
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, Illinois, California, Texas and Western Australia and production and development opportunities in California. Strata-X has 166,895,227 common shares outstanding and trades under the symbol “SXE” on the TSX-V and “SXA” on the ASX.
|Tim Hoops (USA)||or||Colin Christensen (Canada)|
|+1 855-463-2400||+1 403-483-8363|
(1) Reserve information cited in this News Release for Strata-X are P1 and P2 reserves and Prospective Resources that originally appeared in the Company 2015 ASX Annual Report and TSX NI 51-101 F1-3 Filings, per an independent third party report effective June 30, 2015 (“Report”) from Chapman Petroleum Engineering Ltd. (“Chapman”) who's author, Charles Moore, a registered Professional Engineer in the Province of Alberta, Canada, consents to the inclusion of this resource information in this News Release as it appears and information relating to the Reserves is based on, and fairly represents, information and supporting documentation prepared by Charles Moore et al. Information regarding this report can be found on the Company’s Website, the ASX and SEDAR.
This announcement was made in Canada for the TSX.V and in Australia for the ASX.