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CALGARY, Oct. 13, 2014 /CNW/ - Palliser Oil & Gas
Corporation ("Palliser" or the "Company") (TSX
VENTURE: PXL) wishes to provide an operations update.
In the third quarter of 2014, Palliser completed a seven (4.25
net) well capital program. The seven well capital program was
a part of farmout agreements in which the capital expenditures on
the program were completed at minimal cash cost to Palliser, with
certain surface equipment for most of the wells supplied from
Palliser's inventory of surplus equipment.
At Manitou, Saskatchewan, one (0.3 net before payout &
0.5 net after payout) well was drilled, cased and completed for
heavy oil production and placed on production in
September.
At Marwayne, Alberta, four (2.8
net) wells were reactivated in August and September. All four
Marwayne wells have been completed
for heavy oil production and placed on production in September.
At Neilburg, Saskatchewan, two
(1.15 net) wells were drilled, cased and completed for heavy oil
production and placed on production in September.
Palliser is the operator of all of these wells. Early results
from the capital program are encouraging. However, these
project wells had minimal contribution (approximately five (5)
bbl/d) to Q3 production and are expected in the aggregate to
contribute significantly to Q4 production.
Based on field estimates, average net production for the
3rd quarter was approximately 1,180 boe/d, representing
a 13% shortfall as compared to the July 30,
2014 forecast of 1,360 boe/d for Q3 and a 32% decrease over
the prior quarter of 1,739 boe/d. Production in the third
quarter was impacted by four significant items. Firstly, Palliser
sold approximately 125 bbl/d, effective June
1, 2014, to Maha Energy Inc. ("Maha") in a negotiated
business deal. Secondly, Palliser intentionally conducted short
term shut-ins of some producing wells for asset protection due to
the off-setting drilling operations discussed above. Thirdly,
Palliser intentionally shut-in approximately 250 bbl/d of
uneconomic production in the core area of Edam. Finally, a forecast decline of
approximately 30% per annum in existing wells was observed due to
their maturity.
The 250 bbl/d that was shut-in at Edam had high operating costs and the
resulting loss of production had a neutral impact on cash flow from
production. The producing wells that were shut-in due to
off-setting drilling have all returned to production.
Palliser expects production to increase significantly over the
fourth quarter as the new drills and reactivations are optimized
and the previously sold production is consolidated in the pro-forma
company. Fourth quarter pro-forma production guidance of
1,550 – 1,650 boe/d is maintained. The Company forecasts net
debt as at September 30, 2014 in the
amount of approximately $47.7 million
which is consistent with the July 30,
2014 forecast.
About Palliser
Palliser is a Calgary-based
junior oil and gas company focused on high netback heavy oil
production in the greater Lloydminster area of Alberta and Saskatchewan.
Disclaimers
Forward Looking Statements
Certain information included in this press release constitutes
forward-looking information under applicable securities
legislation. Forward-looking information typically contains
statements with words such as "anticipate", "believe", "expect",
"plan", "intend", "estimate", "propose", "project" or similar words
suggesting future outcomes or statements regarding an outlook.
Forward-looking information in this press release may include, but
is not limited to, the completion and timing of the proposed
amalgamation with Maha and matters related or incidental thereto,
timing for recompleting or drilling wells, and the characteristics
and plans of the pro-forma consolidated company. Forward-looking
information is based on a number of factors and assumptions which
have been used to develop such information but which may prove to
be incorrect. Although Palliser believes that the expectations
reflected in its forward-looking information are reasonable, undue
reliance should not be placed on forward-looking information
because Palliser can give no assurance that such expectations will
prove to be correct. In addition to other factors and assumptions
which may be identified in this press release, assumptions have
been made regarding and are implicit in, among other things, the
timely receipt of any required regulatory approvals (including
shareholder approvals). Readers are cautioned that the foregoing
list is not exhaustive of all factors and assumptions which have
been used.
Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially
from those anticipated by Palliser and described in the
forward-looking information. The forward-looking information
contained in this press release is made as of the date hereof and
Palliser undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, unless required by
applicable securities laws. The forward-looking information
contained in this press release is expressly qualified by this
cautionary statement.
United States Matters
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States, nor shall there be any sale
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
FOFI
Any financial outlook or future oriented financial information
in this presentation, as defined by applicable securities
legislation, has been approved by management of Palliser. Such
financial outlook or future oriented financial information is
provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be
appropriate for other purposes.
BOEs
All calculations converting natural gas to barrels of oil
equivalent ("boe") have been made using a conversion ratio of six
thousand cubic feet (six "Mcf") of natural gas to one barrel of
oil, unless otherwise stated. The use of boe may be misleading,
particularly if used in isolation, as the conversion ratio of six
Mcf of natural gas to one barrel of oil is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of crude oil
as compared to natural gas is significantly different from the
energy equivalency of 6:1, utilizing a conversion on a 6:1 basis
may be misleading as an indication of value.
THE TECHNICAL INFORMATION CONTAINED IN THIS RELEASE HAS NOT
BEEN FULLY REVIEWED BY THE TSX VENTURE EXCHANGE AND, AS SUCH,
REMAINS SUBJECT TO CONTINUING REVIEW AND ACCEPTANCE BY THE
EXCHANGE.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Palliser Oil & Gas Corporation