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Quattro, Announces the Closing of the Acquisition of 39 boe/d of Oil and Gas Production in Alberta and Welcomes the Addition of Jeff Boyd, P.Eng to our Management Team

Apr 19 2013 12:00AM

Marketwire

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CALGARY, ALBERTA -- (Marketwired) -- 04/19/13 -- 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 with a private Alberta-based oil and gas exploration and production company to acquire certain oil and gas interests in eastern Alberta.

The acquisition is comprised of a 100% interest in a package of gas producing properties, currently producing an aggregate 39 boe/d (of which 4% is natural gas liquids), and additional associated undeveloped lands in east central Alberta. The production is supported by stable history over the past 3 years, as well as further engineering and assessments of previously shut-in wells that are identified as candidates for re-entry and remediation of up to 110 boe/d of previously producing production within the acquired lands. The Company believes the acquired assets, collectively, provide long-term potential to achieve sustainable production levels in excess of 160 boe/d.

Quattro intends to continue to operate the majority of these assets and will retain a minority interest in certain compression and processing facilities. The effective date of the purchase is February 1st, 2013, with the purchase price being a combination of $200,000 cash and 1,500,000 Class A common shares at a deemed issue price of $0.25 per share. The acquisition has been valued by the Company at 30% of its NPV10 value, or approximately $575,000 (plus G.S.T. and all customary closing adjustments) (the "Acquisition"). The Acquisition remains subject to the normal regulatory approvals.

In addition to the closing of the Acquisition, Quattro will be pleased to welcome Jeff Boyd, principle of the vendor under the Acquisition, as Manager of Operations. A professional engineer with 28 years of experience in the upstream oil and gas industry in Western Canada, Jeff comes with diverse experience in production engineering, production operations, acquisition and divestment evaluations, and management. Leonard Van Betuw, President & CEO of the Company commented, "Jeff's history speaks for itself, his hands-on approach and his desire to become a significant equity holder in Quattro provides our shareholders a great assurance that he is aligned with management's desire to grow Quattro Exploration and Production Ltd. to the same degree as he experienced some years ago with the evolution of Canadian Natural Resources Ltd. (TSX: CNQ) from a small junior into a major producer."

The Company's management and exploration team look forward to Jeff's contributions and development of our growing and diversified asset base in Canada. His diversified experience provides a valuable foundation for his insight into the continued execution of our plans for the previously announced asset acquisition in east Central Alberta, as well as the development of our emerging cold flow heavy oil assets in the Wabasca region of Alberta.

Leonard Van Betuw, President & CEO of the Company comments, "We are very pleased this Acquisition has been concluded and we continue to proceed with a number of previously announced complementary acquisitions, with the intention of establishing adequate proven amounts of free cash flow in the first half of 2013 to support its expanding operations domestically and in Guatemala. The location of this acquisition is very complementary to our current activities and promises be very synergistic."

Summary of the Acquisition

Production: 39 boe/d Oil and Gas, with greater than 110 boe/d of shut-in oil and gasCommon Metrics: $10,895 per flowing boe of productionProven Reserves: $3.24 per boeFacilities: Established and an operating interest, excess capacityLand: 9,240 net acres; 3,160 acres developed and 6,080 acres undevelopedAdditional Potential: (i) optimization, (ii) work-over and (iii) developmental drilling opportunities, with up to 100% interests in the Colony, Sparky, and Upper Dunvegan, which is the basis for the Company's determination for the estimated sustainable production of 160 boe/d.



With this Acquisition, Quattro will be adding well-understood and established production to its organic plans in Central Alberta. In conjunction with the continued development of its organic business plan for 2013, the Company continues to advance its relationship with its financial advisor and is well advanced in its funding plans for its future growth.

This complementary Acquisition, the Company`s engineering and execution of its organic business plan for 2013, in conjunction with and anticipating the closing of the previously announced (March 21st, 2013) east central Alberta acquisition as proposed, along with the cash flow from the established producing assets, now puts the Company well on track to meet its internal projections of achieving rates greater than 1,000 boe/d in the quarter ending June 2013 and anticipates year end 2013 exit production rates in excess of 2,000 boe/d.

The strategy of developing a diversified low risk material growth plan established in western Canada provides the Company and its shareholders the certainty that its production base will continue to grow within the context of its established business plan both in Canada and Central and South America.

About Quattro Exploration and Production Ltd.

Quattro Exploration and Production Ltd. ("QXP") continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, primarily in south central Saskatchewan, with an expanding presence in Alberta. Our core low risk production base will provide us the capacity to aggressively pursue of a series of high impact exploration and development efforts in Central and South America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward - looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

BOE presentation:

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Trading in the securities of Quattro Exploration & Production Ltd. should be considered highly speculative. 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 release.



Contacts:
Quattro Exploration & Production
Leonard Van Betuw
President and Chief Executive Officer
Office (403) 984-3917 or Direct Line (587) 228-7070
leonard@qxp-petro.com
www.qxp-petro.com





Source: Marketwire


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