Company Website:
http://www.horizon-petroleum.com
CALGARY, Alberta -- (Business Wire)
Horizon Petroleum Ltd. (the “Company” or “Horizon”) (TSXV:HPL) is
pleased to report that further to its press releases dated June 23,
2017, and July 26, 2017, it has entered into a series of definitive
agreements (the “Agreements”) with Dublin-based San Leon Energy plc
(“SLE”) regarding the purchase from wholly-owned subsidiaries of SLE and
other SLE-controlled entities, of 100% interests in 2 oil & gas
concessions in the Republic of Poland known as Cieszyn and Bielsko-Biala
(the “Primary Concessions”), plus 100% working interests in 2 additional
oil & gas concessions in Poland known as Prusice and Kotlarka, and
another concession which is under application (together the “Secondary
Concessions”). These concessions cover 3,030km2 and lie
within the prolific Rotliegendes Basin and Carpathian Foldbelt, where
Horizon intends to target undeveloped conventional natural gas
discoveries. Gas infrastructure in these regions is quite extensive, and
gas pricing is attractive; prices on the Poland Power Exchange (TGE)
during 2017 have been in the range of US$4.50-$5.50 per mcf (thousand
cubic feet).
The acquisition of the 5 concessions in Poland is a further step in
Horizon’s strategy to target, acquire, develop and monetize conventional
gas resources in Europe. The scale of the resources is such that they
are highly material to junior independents such as Horizon which have
the technical and operating expertise and experience to develop the
geologically complex reservoirs.
Purchase Price
Horizon previously paid a non-refundable deposit of US$100,000 and
advanced a loan of US$100,000 (the “Horizon Loan”), as part of this
transaction.
The consideration for the acquisition of the Primary Concessions is:
1.
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US$1,000,000 in cash, less the US$100,000 Horizon Loan, for a net
cash payment of US$900,000.
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2.
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C$1,000,000 in common shares in the capital of Horizon (“Horizon
Shares”), based on Horizon meeting specific issuance terms. The
Horizon Shares are to be issued at the lesser of a) C$0.20 per
share, b) the lowest price per share at which Horizon completes an
equity placement for a minimum of C$1 million, up to but not
including the date of closing of the acquisition (the “Completion
Date”), and c) the volume weighted average price per Horizon Share
for the period of 10 trading days immediately prior to the
Completion Date. If Horizon is unable to meet the specific issuance
terms by the Completion Date, it will be required to pay to SLE the
equivalent value of the Horizon Shares in cash.
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3.
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A 6% net profits interest.
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The consideration for the acquisition of the Secondary Concessions is
€10,000 per concession, plus a 6% net profits interest.
Bielsko-Biala (Lachowice) Concession
Located within the Carpathian thrust – fold belt in southern Poland, the
Bielsko – Biala Concession occupies an area of 805km2
(~200,000 acres). In 1984, the Polish Oil & Gas Company (POGC) drilled
the Lachowice-1 well in the southern part of the concession and
encountered 184m of Devonian gas bearing carbonates (no water column).
By the mid 1990s, a further seven wells had been drilled on the highly
compartmentalised structure and of the five that penetrated the
naturally fractured carbonates and sandstones of Devonian age, all
encountered gas columns and gas shows.
The Lachowice field is at a late stage of the appraisal/early stage of
the development life cycle. Lachowice-1, Lachowice-7 and Stryszawa-2K
are the primary wells of interest on the field and, despite being
essentially vertical in their design, showed test rates of up to
5.8mmcf/d in 1986, 8.9mmcf/d in 1995, and 2.5mmcf/d in 1997,
respectively (90-95% methane); each of these wells was drilled and
tested by POGC, with reservoir depths of 3,000-4,000 metres.
Some years after completion the wells were re-tested and despite not
being remediated or acidised, they still flowed economic rates even
though through sub-optimal completions (cemented and perforated liners)
for a naturally fractured formation. These later cased-hole tests were
on Lachowice-1 by Schlumberger in 1996 (~2.6mmscf.d) and on Lachowice-7
(~3.0mmscfg/d) by Apache in 1999.
A range of scaleable development options exist for Lachowice, from
re-entry of the existing suspended well (Lachowice 7) through to a
programme of multiple highly inclined wells and/or sidetracks. Horizon
is targeting first production from Lachowice by the second half of 2018.
Pipeline infrastructure, with ample capacity, is situated within about
10-km of the Lachowice gas discovery.
Cieszyn Concession
Neighbouring the Bielsko-Biala concession, the Cieszyn concession
occupies a 325km2 area (~80,000 acres) of the Carpathian
thrust – fold belt in southern Poland. This concession has seen
significant historic exploration and whilst prospectivity exists at both
Palaezoic and Tertiary levels, much of the activity has focussed on the
relatively shallow (400 - 800m) Miocene aged sands trapped in thrust
belt structures.
Numerous gas discoveries in the Miocene aged reservoirs have been made
in and around the concession (Debowiec-Slaski, Kowale, Pogorz gas
fields) and along trend in the Czech Republic (Horni Zukov, Bruzovice
-Frydek, Pribor, Choryne gas fields). The quality of seismic imaging,
and low exploration well cost, presents an attractive opportunity to
define a future work programme to fully evaluate this concession.
The play fairway of Tertiary aged reservoirs trends eastwards into the
northern part of the Bielsko-Biala concession. This is a significantly
under-explored region, compared to Cieszyn, and can be the focus of
future exploration programmes on the identification and testing of
seismic amplitude anomalies in the prolific shallow Miocene aged
formations.
Kotlarka and Prusice (plus new application)
Concessions
Occupying 1900km2 (470,000 acres) within the prolific and
proven Permian aged Rotliegendes Basin in SW Poland, these three
concessions lie on trend with some of the biggest and most productive
gas fields in Poland. Over 3 TCF (trillion cubic feet) of natural gas
has been developed in the sandstones of the Rotliegendes Formation and
the carbonates of the Zechstein Formation. An extensive gas production
and pipeline infrastructure network with ample capacity has been built
in the Basin. Nearby gas fields include the Zuchlow (850 BCF, or billion
cubic feet), Zalecze (760 BCF), Rawicz (92 BCF), Borzecin (188 BCF),
Bogdaj – Uciechow (635 BCF), and Wierzchowice (422 BCF) fields.
These concessions offer Permian exploration potential with newer seismic
surveys required to help delineate numerous undeveloped
discoveries/abandoned fields on the concessions themselves (including
the Radziadz W, Henrykowice W and Dobrzen natural gas discoveries). The
opportunity to test and evaluate newer/revised drilling practices that
are widely employed in the Rotliegendes Basin in the Netherlands and
Germany could assist in enhancing the reservoir productivity and improve
ultimate recovery.
Closing Conditions
Closing of the acquisition of the Primary Concessions plus the Secondary
Concessions is subject to a number of conditions, including certain
approvals by the government in Poland, as well as the approval of the
TSX Venture Exchange (the “TSXV”). Acquisition of the Secondary
Concessions is further subject to the closing of the acquisition of the
Primary Concessions. In its due diligence process, Horizon has reviewed
testing and drilling performed on or around the Primary and Secondary
Concessions; however, a formal resource report is not available at this
time and Horizon intends to secure such a report as part of the TSXV
approval process.
About Horizon Petroleum Ltd.
Calgary-based Horizon is focused on the appraisal and development of oil
& gas reserves internationally. The Management and Board of Horizon
consist of oil & gas professionals with significant international
experience.
Neither 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.
This press release contains "forward-looking statements" or
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities legislation. Such forward-looking statements include, without
limitation, forecasts, estimates, expectations and objectives for future
operations that are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of Horizon.
Forward-looking statements are statements that are not historical facts
and are generally, but not always, identified by the words "expects",
"plans", "anticipates", "believes", "intends", "estimates", "projects",
"potential" and similar expressions, or that events or conditions
"will", "would", "may", "could" or "should" occur or be achieved. This
press release contains forward-looking statements pertaining to, among
other things entering into the Definitive Agreements and completion of
the transaction, the commercial opportunities and resources relating to
the Concessions and the furtherance of Horizon’s European acquisition
and development strategy.
Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks, which could
cause actual results to vary and in some instances to differ materially
from those anticipated by Horizon and described in the forward-looking
information contained in this press release.
Certain of the "risk factors" that could cause actual results to
differ materially from the Company's forward-looking statements in this
press release include, without limitation, changes of laws or
regulations; the ability to implement business strategies or to pursue
business opportunities, whether for economic or other reasons; status of
the world markets, prices and price volatility; state of capital markets
and ability to raise capital; litigation; the commercial and economic
viability of the extraction technology the ability to Horizon to locate
or extract resources or develop on the Concessions, where discoveries
past discoveries will not necessarily relate to future potential,
reliance on suppliers, contractors, consultants and key personnel, risks
associated with compliance with environmental protection laws and
regulations.
Although Horizon believes that the material factors, expectations and
assumptions expressed in such forward-looking statements are reasonable
based on information available to it on the date such statements were
made, no assurances can be given as to future results, levels of
activity and achievements and such statements are not guarantees of
future performance.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170919005980/en/
Contacts:
For Horizon Petroleum Ltd.
Dr. David Winter,+1 403
984 2444
President & CEO
david.winter@horizon-petroleum.com
or
David
R. Robinson,+1 403 399 9047
VP Business Development
david.robinson@horizon-petroleum.com
Source: Horizon Petroleum Ltd.
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