QUEBEC CITY and CALGARY, Alberta, July 20, 2018 (GLOBE NEWSWIRE) — Junex Inc. (TSX-V:JNX) (“Junex”) and Cuda Energy Inc. (“Cuda”), collectively (the “Combined Company”), are pleased to announce that drilling operations have commenced on the Barron Flats (Deep) Unit in the Powder River Basin, Wyoming. The acquisition of the Barron Flats assets will be completed concurrently with the closing of the arrangement between Junex and Cuda disclosed in the press release issued on June 11, 2018 (available at www.sedar.com), to be voted on at Junex’s shareholder meeting to be held on August 2, 2018.
The BFU 23-14V (SW 14-35N-76W06) vertical Shannon development well has been spud. The near term drilling program will include six (6) gross wells. The Operator, Southwestern Production Corp has obtained 15 drilling licenses/permits for Shannon light oil wells. Included in the drill program will be a high-graded deep vertical stratigraphic test to the Lakota formation to confirm the commercial viability of numerous high impact light oil formations below the Shannon formation which would be developed with horizontal wells. In addition to the commencement of the drilling program at the Barron Flats (Deep) Unit, the following activities are currently ongoing:
- Electrification is underway with wells expected to be on power by the end of August. Electrification eliminates the need for rental wellsite generators, which is projected to reduce operating costs by approximately US$3,000 per well per month.
- The gas processing facility and compression site has been constructed and is being prepared for installation and commissioning which is anticipated to occur in October to coincide with the completion of the gas gathering system which is currently being constructed.
- Sinclair-Converse Transport Midstream, a mid-stream company with assets to be held 33.33% by the Combined Company, is in the process of acquiring an existing right of way which it will utilize for the installation of (i) a spur to connect into an existing oil sales line; and (ii) a natural gas pipeline.
With these active ongoing field developments, the Combined Company will be on track to achieving 2018 exit production of 2,000 boe/d (60% oil and liquids) and achieve top quartile operating netbacks forecasted to average approximately C$33.00/boe in the second half of 2018 based on strip pricing. Additionally, both Junex and Cuda continue to advance Junex’s portfolio of oil and gas projects in Québec and stand ready to proceed with a development program upon receipt of development permits and production licenses.
Mr. Jean-Yves Lavoie and Mr. R. Glenn Dawson had the following to say regarding the update: “We are very excited to embark on an active development program where the combined company has in place all the permits necessary to continue our fully funded 15-20 well development program in Wyoming. With the growth in cash flow from Wyoming the Combined Company will be well positioned to fund development in Quebec when appropriate. The planned development program represents a significant increase in activity for the Junex shareholders and we look forward to updating shareholders as to our progress in the coming weeks and months.”
About Junex Inc.
Junex is a Québec SME that seeks to be a catalyst in accessing Québec’s oil and gas resources, while ensuring that their development becomes an important means of creating collective wealth for Québeckers. Junex’s operations are conducted in a responsible manner, in strictest compliance with the rules, laws and regulations that govern oil and gas activities. To that end, every day it takes all measures to minimize the environmental impact of its activities.
About Cuda Energy Inc.
Cuda, a privately held corporation based in Calgary, Alberta, is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America.
The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long term focus on large, light oil resource based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.
For further information please contact:
President and Chief Executive Officer
President and Chief Executive Officer
Cuda Energy Inc.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Advisories and Forward-Looking Statements:
This news release contains forward-looking statements. All statements other than statements of historical fact included in this release, are forward-looking statements that involve various risks and uncertainties and are based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. In particular, forward-looking information included in this release includes (i) expectations with regard to the transactions to form the Combined Company and acquire the Wyoming properties, their completion and the anticipated benefits and advantages of the transactions, which assume that all necessary shareholder, regulatory and third party consents and approvals required for completion of the transactions are obtained; (ii) the future prospects, including exploration potential, of the Wyoming properties, (iii) the Combined Company’s drilling program and planned field development activities, (iv) production estimates, production growth rates and oil recovery rates, which assume accuracy of technical and geological information and analysis and may be impacted by unscheduled maintenance, labour and contractor availability; (v) capital expenditures and other cash costs, which assume foreign exchange rates and accuracy of production estimates, and may be impacted by unexpected maintenance, the need to hire external resources and accelerated capital plans; (vi) operating netbacks, which assume production and expenditure estimates and may be impacted by energy prices, production estimates, and the timing of payments, and (vii) reserves and resources which are forward-looking statements by their nature involving implied assessment, and may be impacted by energy prices, future drilling results and operating costs. Risk factors that could prevent forward-looking statements relating to the Combined Company and its operating activities from being realized include ongoing permitting requirements, the actual results of current exploration and development activities, operational risks, risks associated with drilling and completions, uncertainty of geological and technical data, market conditions, the availability and nature of alternative sources of energy, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of energy. Although Junex and Cuda have attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
This news release provides certain information on the production rate of wells on properties in close proximity to the Wyoming properties that the Combined Company has agreed to acquire which is “analogous information” as defined by applicable securities laws. This analogous information is derived from publicly available information sources which Cuda and Junex believe are predominantly independent in nature. Some of this data may not have been prepared by qualified reserves evaluators or auditors and the preparation of any estimates may not be in strict accordance with the Canadian Oil & Gas Evaluation Handbook. Regardless, estimates by engineering and geotechnical practitioners may vary and the differences may be significant. Cuda and Junex believe that the provision of this analogous information is relevant to the Combined Company’s activities and forecasting, given its agreement to acquire properties in the area; however, readers are cautioned that there is no certainty that the forecasts provided herein based on analogous information will be accurate.
Any reference in this news release to initial, early and/or test or production/performance rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered “load oil” fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Combined Company. The initial production or test rates may be estimated based on other third party estimates or limited data available at this time. In all cases in this news release initial production or test rates are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons. Well-flow test result data should be considered to be preliminary until a pressure transient analysis and/or well-test interpretation has been carried out.
This news release contains metrics commonly used in the oil and natural gas industry, such as “operating netback”. “Operating netback” equals total petroleum and natural gas sales less royalties and operating costs calculated on a boe basis. This term does not have a standardized meaning and the calculation of such metric set forth herein may not be comparable to the calculation method used or presented by other companies for the same or similar metrics, and therefore should not be used to make such comparisons.
Natural gas volumes have been converted to a barrels of oil equivalent or boe using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe may be misleading, particularly if used in isolation.