Crocotta Energy Announces Strategic Pipeline and Marketing Agreement and Provides Operational Update
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 04/30/13 -- Crocotta Energy Inc. ("Crocotta" or the "Company") (TSX: CTA) is pleased to announce the following:
EDSON PIPELINE AND MARKETING ARRANGEMENT
Crocotta has entered into rich gas premium agreements with Aux Sable Canada LP ("Aux Sable") and an interconnection agreement with Alliance Pipeline Limited Partnership ("Alliance Pipeline") providing access to premium markets in the United States.
Under the agreements Crocotta will deliver approximately 6,000 boepd of liquids-rich gas into the Alliance Pipeline. The liquids-rich gas will be processed and fractionated at Aux Sable Liquid Product's Channahon facility in Illinois.
The Agreements are effective immediately and Crocotta estimates it will be fully operational by June 1, 2013. Crocotta will continue to truck and deliver its oil and condensate from Edson into the Alberta market.
The expected benefits of such arrangement are as follows:
EDSON CARDIUM PROGRAM
Crocotta has drilled or participated in drilling a total of 15 Cardium horizontal oil wells in the Edson Area since late 2011. Average results to date from each of the 11 wells that have been on production for more than 90 days is as follows:
In Q113, Crocotta signed farm-in agreements covering approximately 10 sections of highly prospective Cardium lands and based on internal mapping has added approximately 21 gross (16 net) Cardium horizontal oil locations to its drilling inventory. As at the end of Q113, the total number of high graded Cardium locations (net of Q113 drilling) has increased to 46 net locations.
Based on current on-stream costs of approximately $3.35 million per well, and Crocotta's internally generated type curve, the Edson Cardium wells will have an average rate of return of over 100% and a payback of less than one year.
DAWSON / SUNRISE FACILITY
Crocotta has received approval to install its gas plant facility at Dawson that will allow it to produce into the Alliance Pipeline. Once completed, Crocotta will sell liquids-rich gas in conjunction with its Aux Sable agreement. In Q113, Crocotta completed all required pipelines and will proceed to construct the facility in early Q313. Once completed, the following benefits will be realized on Crocotta's current production (900 boepd) and future drilling:
OPERATIONS UPDATE
Crocotta estimates capital expenditures for Q113 are approximately $32 million of its 2013 Capital Budget of $100 million. In Q113, Crocotta drilled 1.6 net liquids-rich Bluesky horizontal wells and 4.8 net Cardium horizontal oil wells in addition to certain infrastructure projects at Edson and Dawson. Crocotta will continue its Edson drilling program through after break-up and then commence liquids-rich Montney drilling at Dawson-Sunrise in mid to late Q3.
Production for Q113 is estimated at 8,800 boepd and is on track to meet previous guidance of 9,200 - 9,500 boepd of average production and an exit production rate of 10,500 boepd.
FINANCIAL UPDATE
Crocotta estimates net debt to be $95 million at the end of Q113 compared to a $140 million bank credit facility. The recent increase in natural gas prices has led to overall increased cash flow which will reduce debt to cash flow ratios.
Crocotta has the following hedges in place:
SUMMARY
Crocotta is well positioned to show accelerated and material growth through the exploitation of its large proven resource base at Edson and in the Montney and has significant financial flexibility to react to opportunities as they arise.
Forward-Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this document contains forward looking statements and information relating to the Company's oil, NGLs and natural gas production, cash flow, operating costs, royalties, netbacks and capital programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.
Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
BOE Conversions
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Contacts:
CROCOTTA ENERGY INC.
Robert Zakresky
President and Chief Executive Officer
(403) 538-3736
CROCOTTA ENERGY INC.
Nolan Chicoine
Vice President, Finance and Chief Financial Officer
(403) 538-3738
CROCOTTA ENERGY INC.
700, 639 -5th Ave SW
Calgary, Alberta T2P 0M9
(403) 538-3737
(403) 538-3735 (FAX)
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Datum: 30.04.2013 - 10:00 Uhr
Sprache: Deutsch
News-ID 254237
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CALGARY, ALBERTA
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Oil & Gas
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