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File: WesCan - Press Release Asset Acquistion Nov 2014.doc
Suite 2500, 520 - 5th Ave. S.W.
Calgary, AB. T2P 3R7
T 403.265.9464
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www.wescanenergycorp.com
NEWS RELEASE
WesCan Energy Announces Proposed Acquisition of Oil and Gas Properties in Central Alberta
For Immediate Release November 18, 2014
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
--->
November 18, 2014 - Calgary, Alberta - WesCan Energy Corp. (TSXV:WCE) ("WesCan" or the "Corporation") announced today
--->that it has signed a purchase and sale agreement with an arm's length major exploration and production company (the "V
--->endor") to acquire oil and gas properties in Alberta (the "Acquisition") producing approximately 100 BOE/d (65% oil an
--->d NGLs, 35% natural gas) for an aggregate purchase price of $2,346,500. The purchase price will be satisfied by a cas
--->h payment in the amount of $2,000,000 (subject to standard closing adjustments) and the issuance of 2,100,000 units of
---> the Corporation ("Units") at a deemed value of $0.065 per Unit. Each Unit will be comprised of one common share of W
--->esCan and one common share purchase warrant ("Warrant"), with each Warrant entitling the Vendor to purchase an additio
--->nal common share at a price of $0.10 per share exercisable for a period of two years from the closing date. WesCan ex
--->pects to fund the cash portion of the purchase price through a combination of existing cash, bank debt and equity / de
--->bt financing, the details of which will be announced at a later date. The Acquisition is expected to close on or befo
--->re November 30, 2014, with an effective date of September 1, 2014.
Under the Acquisition, WesCan will purchase the working interests of the Vendor in certain assets in the Carrot Creek,
---> Windfall and Three Hills Creek areas of central and southern Alberta.
The Carrot Creek property is located in central Alberta, where WesCan will acquire working interests in three producin
--->g units and several non-unitized wells. Production is both operated and non-operated and all wells are producing from
---> the Cardium formation.
The Windfall property is located in central Alberta, where WesCan will acquire a significant working interest in a non
--->-operated, long life, multi-zone, liquids-rich producing natural gas well.
The Three Hills Creek property is located in southern Alberta. WesCan will acquire various non-operated working and ro
--->yalty interests in wells producing oil, gas and associated liquids.
The summary of net working interest and royalty reserves associated with the Acquisition are described in the table be
--->low:
Carrot Creek(1)
Windfall(1)
Three Hills(1)
Oil and NGLs (Mbbl)
Proved Developed Producing
161.4
6.2
15.9
Proved Undeveloped
-
-
-
Total Proved
161.4
6.2
15.9
Probable Developed Producing
55.6
1.4
5.3
Probable Undeveloped
41.2
-
-
Total Probable
96.8
1.4
5.3
Total Proved+Probable
258.2
7.6
21.2
Sol'n and non-associated Gas (MMcf)
Proved Developed Producing
139.2
366
274
Proved Undeveloped
-
-
-
Total Proved
139.2
366
274
Probable Developed Producing
47.0
79
67
Probable Undeveloped
-
-
-
Total Probable
47.0
79
67
Total Proved+Probable
186.2
445
341
Grand Total (Mboe)
Proved Developed Producing
184.6
67.2
61.6
Proved Undeveloped
-
-
-
Total Proved
184.6
67.2
61.6
Probable Developed Producing
63.4
14.6
16.5
Probable Undeveloped
41.2
-
-
Total Probable
104.6
14.6
16.5
Total Proved+Probable
289.2
81.8
78.1
Net Present Value Before Tax Discounted at 10% ($k)
Total Proved
2257.1
678.9
735.0
Total Probable
1238.2
101.4
172.2
Total Proved+Probable
3495.3
780.3
907.2
Notes to the above table:
The above reserves evaluations were each conducted by McDaniel & Associates Consultants Ltd. ("McDaniel") for the Vend
--->or, each with an effective date of December 31, 2013 but including a mechanical update as at April 1, 2014. The evalu
--->ations were prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activitie
--->s ("NI 51-101") relying on the Canadian Oil and Gas Evaluation Handbook ("COGEH") reserves definitions. It should be
--->noted that these evaluations were extracted from the larger corporate evaluation for the Vendor but confirmed to be re
--->asonable by WesCan based on supplementary due diligence.
McDaniel utilized their April 1, 2014 forecast prices for the mechanical update.
It should not be assumed that the estimates of the present value of future net revenues before tax presented in the ab
--->ove tables represent the fair market value of the reserves. There can be no assurance that the forecast price and cost
---> assumptions contained in the McDaniel reports will be consistent with actual prices and costs and variances could be
--->material.
The completion of the Acquisition is subject to a number of conditions, including receipt of all required regulatory a
--->pprovals, including approval of the TSX Venture Exchange.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Greg T. Busby, President & CEO
WESCAN ENERGY CORP.
Tel: (403) 265-9464
NEITHER THE 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 NEWS RELEASE.
Forward Looking and Cautionary Statements
Certain statements contained in this press release may constitute forward-looking statements. These statements relate
---> to the reserves and resources attributable to the Acquisition. All statements other than statements of historical fa
--->ct may be forward-looking statements. Forward{‐ ‐}looking statements are necessarily based upon assumptions and
--->judgments with respect to the future. In some cases, forward{‐ ‐}looking statements can be identified by termino
--->logy such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions.
---> These statements represent management's expectations or beliefs concerning, among other things, future operating res
--->ults and various components thereof affecting the economic performance of WesCan. Undue reliance should not be placed
--->on these forward{‐ ‐}looking statements which are based upon management's assumptions and are subject to known a
--->nd unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance a
--->nd financial results in future periods to differ materially from any projections of future performance or results expr
--->essed or implied by such forward{‐ ‐}looking statements. Accordingly, readers are cautioned that events or
---> circumstances could cause results to differ materially from those predicted. These statements speak only a
--->s of the date specified in the statements.
The Corporation's actual results could differ materially from those anticipated in the forward looking statements cont
--->ained throughout this news release as a result of the material risk factors set forth below:
volatility in market prices for oil and natural gas;
liabilities inherent in oil and natural gas operations;
uncertainties associated with estimating oil and natural gas reserves;
uncertainties associated with the Corporation's ability to obtain additional financing on satisfactory terms;
geological, technical, drilling and processing problems; and
general business and market conditions.
These factors should not be construed as exhaustive. Unless required by law, the Corporation does not undertake any o
--->bligation to publicly update or revise any forward looking statements, whether as a result of new information, future
--->events or otherwise.
BOE Presentation. References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ra
--->tio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in
---> isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the
---> burner tip and does not represent a value equivalency at the wellhead.
Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is like
--->ly that the actual remaining quantities recovered will exceed the estimated proved reserves.
Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equa
--->lly likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved
---> plus probable reserves.
Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. It is un
--->likely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus p
--->ossible reserves.
Developed reserves are those reserves that are expected to be recovered from existing wells and installed facilities o
--->r, if facilities have not been installed, that would involve a low expenditure (e.g., when compared to the cost of dri
--->lling a well) to put the reserves on production. The developed category may be subdivided into producing and non-produ
--->cing.
Developed producing reserves are those reserves that are expected to be recovered from completion intervals open at th
--->e time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on pr
--->oduction, and the date of resumption of production must be known with reasonable certainty.
Developed non-producing reserves are those reserves that either have not been on production, or have previously been o
--->n production but are shut-in and the date of resumption of production is unknown.
Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expendit
--->ure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must f
--->ully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.
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