CALGARY, ALBERTA -- (Marketwire) -- 03/21/13 -- Quattro Exploration and Production Ltd. (TSX VENTURE: QXP) ("Quattro" or the "Company") is pleased to announce that it has entered into an arms-length agreement (the "Letter of Intent" or "LOI") with an Alberta-based private oil and gas exploration and production company to acquire certain oil and gas interests in East Central Alberta.
The acquisition comprises of four production packages, currently producing more than 580 boe/d (of which greater than 30% is oils and liquids), and developed land of approximately 82,395 acres (net), undeveloped lands of 75,220 acres (net) for a total of 157,615 acres (net) in East Central Alberta (the "Acquisition"). Recent production is supported by a September 30th, 2012 Sproule & Associates engineering report showing that the assets produced more than 650 boe/d of production in 2012 of which 230 boe/d were medium to light oil and liquids.
Quattro will operate the majority of the assets being acquired and will own a 75% to 87% working interest in these conventional oil and gas fields in East Central Alberta. The effective date of the Acquisition will be January 1st, 2013, with a purchase price of $7.3 million plus G.S.T. and customary closing adjustments. The Acquisition is expected to close on or before April 29th, 2013 and is subject to completion of due diligence on or before April 15, 2013, the execution of definitive documentation on or before April 22, 2013 (with industry standard terms) and completion of financing which is anticipated to consist of a mix of equity and debt.
Leonard Van Betuw, President & CEO of the Company, commented "We are very pleased this acquisition is proceeding as proposed and we continue to pursue a number of complementary acquisitions with the intention of establishing adequate proven amounts of free cash flow in the first half of 2013 to support the expansion of our operations both in Guatemala and domestically. The closing of this acquisition will result in an average net production of 750 boe/d being reported by the Company in first quarter ending March 31st, 2013 and a path towards 2,000 boe/d later in 2013."
Summary of the Acquisition
Production: 580 boe/d Oil and Gas, with greater than 70 boe/d of shut in oil and gasCommon Metrics: $12,586 per flowing boeProven Reserves: $3.05 per boeFacilities: Established and operating with a high working interest, and excess capacityLand: 157,615 net acres; 82,395 acres developed and 75,220 acres undevelopedAdditional Potential: (i) optimization, (ii) work-over and (iii) developmental drilling opportunities, with up to 100% interests in the Leduc, Viking and Mannville horizons, which will allow for the establishment of additional production to a total of more than 1,000 boe/d.
With this Acquisition, Quattro will be combining understood and established production with a number of partially - developed conventional oil plays. The Company will continue to build from its growing well-established core competencies, which includes mapping conventional, shallow oil and gas trends and the successfully implementation of shallow drilling and completion techniques at low cost.