/NOT FOR DISTRIBUTION TO
The Corporation also announces that it has been granted conditional approval by the
The net proceeds of the private placement will be used to fund the acquisition in
The Corporation has executed a Participation Agreement ("PA") and Joint Operating Agreement with
The fundamental terms of the PA are as follows: (i) the Corporatoin will advance USD$13.5M to acquire interests in the three development wells; (ii) upon commencement of production, the Corporation will receive first priority to 70.74% of the net production revenues; and (iii) upon repayment of the Corporation's capital contributions, the working interest entitlements will be adjusted to 53.06%.
- Located in one of the world's major mega basins
- Asset surrounded by major upstream and midstream infrastructure
- Up to
$28 Million of NPV (10) potential - Gross reserves of 21 BCF and 674 MBO associated with proposed development plan
- Additional unquantified contingent resources provide optionality and running room
- Highly experienced and proven management
- Project largely de-risked
Grand Slam (Figure 1) offers and attractive opportunity to acquire 53.06% working interest by drilling three (3) development wells in the thickest portion of the Claughton A&B reservoirs (Frio Fm), that will recover ~21 BCF & 647,000 Bbls of gross reserves at a total capital expenditure of approximately $13.5 million. Each new well is estimated to cost ~$4.7 million to drill and complete (D&C). It is expected the new wells will produce a balance mix of gas (85%) and liquids (15%), providing a high-margin stable cashflow. Arcadia is the non-operated partner and brings nearly 100 years of operating experience in the basin.
Grand Slam is a liquid-rich gas field discovered in 2000 by the completion of the Runnells Gas Unit Well No.3. The discovery well initially produced 22 MMscfpd. Located in the heart of the Frio trend wedged between several large gulf coast fields 90 miles SWof Houston in Matagorda County. Grand Slam is covered by proprietary 3D seismic, it produced ~21 BCF of gas and 665,000 Bbls of condensate, out of seven wells within the leased acreage (704 acres). Historically, some of the wells had an initial production (IP) ~20 MMscfpd and 620 Bcpd. (Figure 1).
Reserves volumes reported in Table 1 are the result of a third-party reserves evaluation as of June 1, 2022, performed by
Net to Appraised Interest (CEP's Share) | |||||||||
Reserves | Cumulative Cash Flow - M$ | ||||||||
NaturalGas MMscf Sales Volume | Condensate MBbls Sales Volume | Conventional Natural Gas MMscf | Condensate MBbls | Undiscounted | Discounted at: 10%/year | ||||
Description | |||||||||
PROVED | Gross | Net | Gross | Net | |||||
Proven Undeveloped | |||||||||
Project, | 12,928 | 404 | 7,044 | 5,515 | 220 | 172 | 24,945 | 16,785 | |
Total Proved Undeveloped | 12,928 | 404 | 7,044 | 5,515 | 220 | 172 | 24,945 | 16,785 | |
Total Proved | 12,928 | 404 | 7,044 | 5.515 | 220 | 172 | 24,945 | 16,785 | |
PROBABLE | |||||||||
Probable Underdevelped | |||||||||
Project, | 5,172 | 162 | 2,484 | 1,911 | 78 | 60 | 14,727 | 6,927 | |
Total Probable Underdeveloped | 5,172 | 162 | 2,484 | 1,911 | 78 | 60 | 14,727 | 6,927 | |
Total Probable | 5,172 | 162 | 2,484 | 1,911 | 78 | 60 | 14,727 | 6,927 | |
Total Proved Plus Probable | 18,100 | 566 | 9,528 | 7,426 | 298 | 232 | 40,672 | 23,712 | |
POSSIBLE | |||||||||
Project, | 2,586 | 81 | 1,242 | 939 | 39 | 29 | 7,116 | 4,204 | |
Total Poasible | 2,586 | 81 | 1,242 | 939 | 39 | 29 | 7,116 | 4,204 | |
Total Proved Plus Probable Plus Possible | 20,686 | 647 | 10,770 | 8,365 | 337 | 261 | 47,788 | 27,916 | |
M$ neans thousands of dollars | |||||||||
Sales Volume are the total gross sold hydrocarbons produced | |||||||||
Gross reserves are the total of the Company's working interest share before deduction of royalties owned by others | |||||||||
Net reserves are the total of the Company's working interest share after deducting the amounts attributable to royalties owned by others |
Table 1. Chapman's reserves report summary
The table shows the Total Proved Undeveloped (PUD), Probable (2P) and Possible (3P) reserves in Gross and Net to CEP. Chapman's reserves evaluation only considers the proposed three (3) well development plan. Other resources could be produced with additional infill drilling locations as estimated by the Operator.
Arcadia is a 93-year-old independent Texas based oil and gas company with its antecedent founding in 1929 shortly after the discovery of the great East Texas oil field. The company which was a part of the early Texas petroleum industry pioneers was headquartered in Tyler, Texas for 61 years before moving to Dallas, Texas in 1991. The company's operational activities have been primarily focused on the
Three of the nine wells previously drilled on the property 10 years ago had initial flow rates of 20 mmcf of natural gas and 500 barrels of condensate liquids before two were lost to mechanical issues and the other well faulted out. In all, seven of the nine wells drilled previously flowed natural gas and concentrate liquids. With today's natural gas and oil price structure, wells that had similar production would yield attractive returns. .
A National Instrument 51-101Reserve Report was completed by Chapman Engineering of
On behalf of the Board of Directors of
President and CEO
Neither the
SOURCE
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