Exploration & Production | Reserves | Capital Markets | Capital Expenditure | Drilling Program

Stone Point Energy Looking at Potential Acquistions

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StonePoint Energy Inc. has announced it has filed on SEDAR its audited financial statements and related management's discussion and analysis for the year ended December 31, 2014 as well as its Annual Information Form.

Activity Update

The fourth quarter saw StonePoint close its recapitalization of Blackdog Resources allowing the Company to immediately begin work on executing its growth strategy.

Prior to year end, the Company built an initial position in the Valhalla area which currently consists of five sections (3.0 net) of highly prospective Montney lands. In addition, the Company participated in the re-completion of an existing vertical well in which three metres of perforations in the Mid-Montney were fracture stimulated. The well production tested for approximately two days with a final gross rate of 0.7 MMcf per day and a flowing tubing pressure of 300 psi. The well's performance is a positive indication of the potential of the Montney zone and the Company is currently working on plans for a follow up horizontal well.

The Company has also accumulated a small exploration position targeting the Dunvegan Formation in the Valhalla/Elmworth area. Plans to drill a horizontal well in 2015 are ongoing with an anticipated spud date in the third quarter.

StonePoint had a positive cash position of approximately $15 million at the end of 2014 and is anticipating a capital budget of $3.5 - $4.0 million for the second half of 2015. It is expected that with a successful Dunvegan well the Company will be in a favourable cash flow position in later 2015 with sufficient funds to pursue further drilling opportunities.

 

As previously released, the Company has Proven plus Probable gross reserves of 2,218 MBoe; Total Proved gross reserves of 1,029 MBoe; and Proved Developed Producing gross reserves of 281 MBoe, an increase of a 399%, 270% and 646% respectively over comparable December 31, 2013 reserve balances. This translates into a year end net asset value of $0.14 per share based on Trimble Engineering Associates Ltd. January 1, 2015 price forecast discounted at 10%.

With continued weakness in commodity prices, the Company has evaluated a number of potential acquisitions both corporate and asset-based and is beginning to see the quality of offerings improve. We anticipate continued weakness in the commodity price environment and believe that prices will begin moving towards purchase price multiples that are more attractive through the balance of the year.