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The transaction is expected to increase Permex’s reserves by 240% through the primary formation; the expected additional reserves after further evaluation of the formation included in the lease
Vancouver, British Columbia-(Newsfile Corp.-October 27, 2021)-Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCF) (“Permex” or”company“), a leading junior oil and gas company, has completed a previously announced sale and purchase agreement (“PSA“) and Pratt Oil Company, LLC, Rockport Permian, LLC and Petro America Resources, LLC (“Seller”), Now holds Mabee Breedlove Clearfork Unit, Mallard Breedlove lease, Carter Clearfork lease and Erwin Eoff lease (ie “assets”) Located in Martin County, Texas.
This acquisition enhances Permex’s financial and operational strength by increasing the high-quality and extremely low (5%) light oil asset base. As the company implements additional workover and drilling programs, it is expected to generate strong free cash flow. In addition, this acquisition is in line with the company’s strategy of acquiring and developing undervalued and low-risk opportunities to support the establishment of a strong investment portfolio with strategic development advantages. Martin County Assets currently mainly produces from the ClearFork formation, but under the lease, other formations can be used for further development to increase oil field production.
Strategic acquisition highlights
- The attractive purchase price is based solely on proven developed production (“PDP”) reserves.
- Increased Permex’s total oil and gas planting area in Texas and New Mexico to 11,700 acres, an increase of approximately 290% since August 2021.
- Only through Clearfork, the main formation, reserves growth is expected to exceed 240%. Additional reserves will be booked after further independent evaluation of the leased San Andres and Spraguey districts. Management expects to realize the development of these locations from the first quarter of 2022.
- More than 28 proven undeveloped (“PUD”) drilling locations and more than 19 possible (“PROB”) drilling locations have been identified to support long-term development. These additional locations may increase the value of PV-10 by US$159 million, realizing a price of US$65 per BOE.
- Exposure to the multi-zone asset base concentrated in the Clearfork, San Andres and Spraberry formations, with a large number of low-risk drilling inventories in identified high-economic light-weight oil fields, important workover opportunities, and competitive forecast returns.
- Optimizing the current production wellbore through water injection, recompletion and enhanced oil recovery (“EOR”), resulting in the potential for substantial annual free cash flow.
A strong land location for offset drilling by Endeavor Energy and Diamond Back Energy.
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Permex Petroleum CEO Mehran Ehsan said: “We are very pleased to complete this highly anticipated acquisition, which has increased our oil and gas asset footprint by nearly three times.” “This asset not only provides additional drilling and reentry. And EOR opportunities, it also brings enough output to support future income and cash flow to strengthen our balance sheet. We believe that trading indicators will increase in the short term, thereby enhancing our balance sheet.” Market position, And ultimately bring sustainable value to our shareholders. “
Other locations may increase the value of PV-10 by USD 159 million at the realized price of USD 65 per BOE
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About Permex Oil Company
Permex Petroleum (CSE: OIL) (OTCQB: OILCF) is a uniquely positioned primary oil and gas company with assets and operations in the Permian Basin of West Texas and the Delaware Sub-basin of New Mexico. The company focuses on combining the sustainable growth of its Held by Production assets developed at low cost with its current and future Blue-Sky projects to achieve scale growth. The company, through its wholly-owned subsidiary Permex Petroleum US Corporation, is the licensed operator in these two states; and it owns and operates on private, state and federal land.For more information, please visit www.permexpetroleum.com.
contact information
Permex Petroleum Corporation
Mehran Ethan |
President, CEO and Director
(214) 459-2782
Scott Kelly
Chief Financial Officer, Company Secretary and Director
(778) 373-5421
Or for investor relations, please contact:
Brooks Hamilton
OILCF@mzgroup.us
Warning disclaimer:
Neither the Canadian Stock Exchange, OTCMarkets, or their regulatory service providers (as this term is defined in their respective policies) accepts responsibility for the adequacy or accuracy of this press release.
Forward-looking statements
The information in this press release may involve forward-looking statements under applicable securities laws. The entire contents of the forward-looking statements contained herein are clearly limited by this cautionary statement. The forward-looking statements contained in this document were made on the date of publication of this document, and the company does not undertake any intent or obligation to update or revise any forward-looking statements, whether due to new information, future events or other reasons, unless applicable Clear requirements of securities laws and regulations. Although management believes that the expectations contained in such forward-looking statements are reasonable, it cannot guarantee that such expectations will prove to be correct. This press release does not constitute an offer to sell or solicit to purchase any of the securities described herein, and therefore should not be overly relied on. Neither CSE, OTC Markets nor their regulatory service providers (this term is defined in the policies of any exchange) is not responsible for the adequacy or accuracy of this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/100977
Source: Press file
Version number: 49106
There is no offer to sell, no invitation to buy, and no recommendation for any securities or any other products or services in this article. In addition, nothing in this PR should be construed as a recommendation to buy, sell or hold any investment or securities, or participate in any investment strategy or transaction. You are responsible for determining whether any investment, investment strategy, securities or related transactions are suitable for you based on your investment objectives, financial situation and risk tolerance. Regarding your specific business, legal or tax situation, please consult your business adviser, lawyer or tax adviser.
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