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Greenfields Petroleum Corp
Symbol GNF
Shares Issued 22,048,977
Close 2015-01-28 C$ 0.75
Market Cap C$ 16,536,733
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Greenfields' Bahar produces 5,778 gross boe/d in 2014

2015-01-29 18:44 ET - News Release

Mr. John Harkins reports

GREENFIELDS PETROLEUM CORPORATION ANNOUNCES 2015 BUDGET FOR THE BAHAR PROJECT IN AZERBAIJAN

The operating company of Greenfields Petroleum Corp.'s Bahar project, Bahar Energy Operating Co. (BEOC), continues work on its redevelopment of the Gum Deniz and Bahar fields in the Bahar ERDPSA (exploration, rehabilitation, development and production-sharing agreement), Azerbaijan. BEOC has announced a 2015 budget for the Bahar project, including gross operating costs of $37.8-million and gross capital costs of $31-million. This budget is focused on continued growth of oil and gas production through workovers and recompletions on the oil and gas fields.

Gross field production for 2014 averaged approximately 26.6 million cubic feet per day and 1,351 barrels per day, or 5,778 barrels of oil equivalent per day. Gross field production was approximately 22.4 million cubic feet per day and 1,206 barrels per day, or 4,938 barrels of oil equivalent per day, in the fourth quarter of 2014, due to the suspension of drilling in the second quarter attributable to the drilling contractor failing to maintain the necessary rig insurance. The 2015 budget anticipates average production of approximately 29.6 million cubic feet per day and 1,475 barrels per day, or 6,408 barrels of oil equivalent per day. Workovers and recompletions continue to effectively add production in both the Gum Deniz and Bahar fields during the suspension of drilling. In the near term, the operator is planning to access a crane barge for the installation of equipment and materials to allow three additional gas well workovers to proceed in the coming months.

A 3-D seismic survey continued through January, 2015. It is anticipated that the operator will complete the survey in February with approximately 96 square kilometres of the survey acquired. This 3-D seismic will be processed on an expedited basis by PSG Kahzar in Baku for use in targeting additional development well take points in the Gum Deniz oil field. The operator intends to tender for drilling rigs in mid-2015 to support an active drilling program in 2016.

Furthermore, an agreement has been reached in principal with regard to a new gas sales contract for the sale of Bahar gas for a term of five years, with sales price continuing at $3.96 (U.S.) per thousand cubic feet.

John Harkins, president and chief executive officer of Greenfields, stated: "The 2015 budget allows the Bahar project to provide adequate positive cash flows to fund the project's ongoing operating costs and capital programs in the current oil price environment below $50 per barrel. We anticipate that once our partners' ownership interest in Bahar Energy Ltd. is resolved and funding as required under joint operating agreement is provided by all of the contractor parties, the project should be self-funding in 2015. Although our focus remains on long-term oil production growth from the project, the recent five-year extension of our gas sales contract through December, 2019, provides strong gas sales in the near term for the project."

Greenfields has agreed to issue a total of 55,685 common shares of the company to certain directors of the company in satisfaction of director fees payable to such directors in the total amount of $55,685 ($48,000 (U.S.)). The deemed price per common share to be issued pursuant to these transactions is $1 (86.2 U.S. cents), being the closing price of the common shares on the TSX Venture Exchange on Dec. 31, 2014, the date that the debt became payable. The issuance of the common shares is subject to the approval of the TSX Venture Exchange. The common shares will be subject to a four-month hold period from the date of issuance.

In addition, the company has issued 6,000 common shares to an officer pursuant to an existing agreement with such officer related to performance objectives. The company received conditional acceptance of the TSX Venture Exchange with respect to such issuance on Jan. 23, 2015. The common shares are subject to a four-month hold period from the date of issuance. The deemed price per common share issued is 89 cents (72 U.S. cents), being the closing price of the common shares on the TSX Venture Exchange on Jan. 23, 2015.

We seek Safe Harbor.

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