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Relentless Resources Deferring HZ Development

Share Print Bookmark    |    Thursday,August 20,2015

Relentless Resources Ltd. has announced that it has issued its June 30, 2015 unaudited condensed interim financial statements and related MD&A.

Highlights:

• Daily production volumes increased by 51% to 354 boe/d from 235 boe/d
• Per unit average commodity prices increased by 31% to $39.17/boe versus $29.85/boe
• Oil and gas revenues increased by 100% to $1,261,288 from $632,026
• Per unit operating expenses improved by 38% decreasing to $12.37/boe from $19.98/boe
• Field operating cash flow increased by 354% to $650,406 as compared to $143,235
• Field operating net-back increased by 198% to $20.20/boe as compared to $6.77/boe
• Cash flow net-back increased to $14.39/boe as compared to $0.95/boe

Corporate update

• During Q2 2015, Relentless had five oil wells at Heathdale producing through the multiwell tank treating battery. The 8-7 horizontal well only produced two out of the three months during Q2 as the 14-8 and 7-8 wells were being tested. All Heathdale production is now on and has stabilized with the exception of the 16-6 well which is described below.
• Current oil and gas prices are causing Relentless to defer horizontal well capital spending and focus on other lower cost projects that capture future reserves and lower operating costs.
• Subsequent to Q2 2015, Relentless drilled, cased and completed the 16-6-27-9 W4 Heathdale vertical step-out well and acquired one section of crown mineral rights. The well tested 46 barrels of oil over 27 hours of testing and is shut in for pressure build-up and tie in. This well further substantiates the Glauconite play concept where the over pressured oil deposit is present in a 3,000 acre embayment caused by a Paleozoic aged low. The 16-6 well was drilled, cased, completed and tested for a gross cost of $420,000 which is 30% below last year's costs. It is expected that the 16-6 well will be tied into the Heathdale multiwell battery in September and that the total on-stream cost of this well will be approximately $550,000. Based on field estimates, the Heathdale property is producing approximately 180 boe/d (70% oil), net to Relentless.
• Working with Heathdale area service providers, Relentless has also reduced clean oil trucking costs by 30% and third party solution gas processing fees by 40%.
• Although current commodity prices are curtailing capital spending and not allowing for production growth, Relentless has a large, 100% working interest and operated oil reserve at Heathdale which has over 30 horizontal development locations. The Company's Pine Creek and Peace River Arch assets also have high working interest oil upside. In short, Relentless sees the industry downturn as an opportunity to optimize the Heathdale asset and potentially align itself inside a larger company, with similar corporate direction, at the bottom of the market.
• The Management and Directors of Relentless would like to thank shareholders for their support given the short term issues surrounding the industry and public markets.