Exploration & Production | Deals - Acquisition, Mergers, Divestitures | Key Wells | Capital Markets | Capital Expenditure | Drilling Program

Leucrotta B-14 Montney Well EUR Updated To 1Mboe

Share Print Bookmark    |    Thursday,April 30,2015

Leucrotta Exploration Inc. has announced its financial and operating results for the three months and year ended December 31, 2014.

All dollar figures are Canadian dollars unless otherwise noted.

Highlights

• Commenced active oil and natural gas operations on August 6, 2014 as a result of the closing of an arrangement agreement between Leucrotta, Crocotta Energy Inc. and Long Run Exploration Ltd. whereby Crocotta transferred its oil and natural gas assets located in British Columbia to Leucrotta.
  
• Long Run acquired all of the issued and outstanding common shares of Crocotta in exchange for 0.415 of a common share of Long Run. Immediately prior to the exchange for Long Run common shares, Crocotta transferred the BC Assets to Leucrotta and each Crocotta shareholder received 1.0 common share of Leucrotta and 0.2 of a Leucrotta common share purchase warrant (one whole warrant being an "Arrangement Warrant").
• Raised $93.3 million in Q3 2014 by issuing 54.9 million common shares at a price of $1.70 per common share through a bought deal private placement, an insider private placement and the exercise of Arrangement Warrants.
• Averaged 2,168 boe/d of production during 2014 (Q4 2014 averaged 2,538 boe/d).
• Acquired 111,100 gross (99,000 net) acres of Montney rights during 2014 in exchange for $51.3 million cash and 4.7 million common shares.
• Exited 2014 with working capital of $25.0 million.
• Entered into a $25.0 million revolving operating demand loan credit facility with a Canadian chartered bank during Q3 2014.

President's Message

• On August 6, 2014 Leucrotta became a stand-alone entity with the mandate to further its predecessor's (Crocotta's) development of its highly prolific and liquids-rich Montney assets located in Northeast British Columbia.
• During Q4 2014, Leucrotta commenced the drilling of its large Montney block of land in the Dawson-Sunrise area of Northeast British Columbia. Two step-out wells were drilled with one encountering liquids-rich gas and the other encountering light oil. As previously announced, the IP30 rates of the wells were 447 boepd (61% oil and liquids) and 442 boepd (37% oil and liquids), respectively. The oil well was of particular significance given estimated oil in place of 26 million barrels per section and success of other operators in the area developing Montney oil. While further delineation is needed to determine the extent of the oil pool, such accumulations are generally over a larger area and could be a very material oil resource play for Leucrotta.
• The original Lower Montney discovery well at Doe (B4-19) continues to outperform and was upgraded to 1.1 million boes in the latest independent reserve report. The well has been on production for over a year and is still producing over 600 boepd.
• Subsequent to year-end, Leucrotta also tested its horizontal Baldonnel oil well at Stoddart. The Baldonnel zone is a high water cut carbonate zone analogous to the Mississippian zone in Southeast Saskatchewan and is estimated to have over 15 million barrels of oil in place per section. The well was producing over 1,500 barrels of water and 315 barrels of light oil at a low draw-down on the well. The Company is very encouraged by this rate and will construct a battery and water disposal to produce the well. Leucrotta has approximately 45 sections of land prospective for Baldonnel oil and if successful, would drill 4 to 8 wells per section to develop this potentially large light oil resource.
• As at December 31, 2014 Leucrotta had $25 million of cash and positive working capital and a $25 million undrawn bank credit facility. Leucrotta will be conservative with its go forward spending and will watch for stabilization in the commodity market before it invests material amounts of capital in the future. The Company expects that it will commence development drilling at Doe offsetting its B4-19 well in the fall and work towards filling its 25 mmcf/d sweet gas plant. Other than development wells at Doe, Leucrotta will spend capital to tie-in the Montney oil well, set up the Stoddart facilities and recomplete existing wells in the Montney. Currently, Leucrotta does not have any plans to draw on its bank credit facility in 2015.
• Leucrotta's business plan is to increase production and cash flow through development drilling at Doe and slowly delineate its large resource base in the Montney with a combination of recompletions, vertical drills and horizontal drills.