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 November 3, 2015 - 7:43 AM EST
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CORRECTION FROM SOURCE: The Quebec Government Highlights the Technical and Economic Viability of the Anticosti Project

QUÉBEC CITY, QUÉBEC--(Marketwired - Nov. 3, 2015) -

This document corrects and replaces the press release that was sent on November 2, 2015 at 11:22 AM EST. The error occurred in the first bullet of the SEA highlights section where it should have read "and 7.7 billion cubic feet of natural gas" and not "and 7.7 million cubic feet of natural gas". The complete and corrected version follows.

Petrolia, Inc. (TSX VENTURE:PEA) is pleased to note that the studies that were completed for and published by The Government of Quebec as part of the Strategic Environmental Assessment ("SEA") conclude that the Anticosti project is both economically viable and technically and environmentally feasible. The SEA is based on 64 studies conducted over the last two years by independent experts from a variety of backgrounds.

The SEA* highlights the following:

  • In 2013, Quebec imported 137 million barrels of oil and 7.7 billion cubic feet of natural gas from other Canadian provinces, the U.S.A. and various other countries around the world. This amounted to $13.5 billion of imported hydrocarbons, which constitutes 61% of the commercial trade deficit of the Province;
  • The Province of Quebec has a long history of oil & gas exploration and a number of prospective basins, including Anticosti Island, which hold great potential for the production of hydrocarbons.
  • In particular, the Macasty Shale formation is geologically similar to the productive Utica and Pleasant Point formations in Ohio.
  • During a 75 year period and based on an "optimized" production scenario, Anticosti Island could produce a total of 11,683 trillion cubic feet of natural gas and 584 million barrels of oil. During the maximum production period, this could amount to 246 trillion cubic feet of natural gas and 12.3 million barrels of oil per year, which represents 113% of the annual gas consumption and 9% of the annual oil consumption for the Province;
  • The project could have potential revenues of $169 billion and profits of $75 billion; 
  • Including royalties, taxes and its ownership interest in the project, this could result in revenues to the Government of Quebec of $46 to $48 billion and would create more than 2,000 jobs;
  • Based on a detailed analysis of all of the key variables including the costs of drilling, production and infrastructure for the full development of the project, the Government of Quebec expects the project to have an 80% to 86% chance of being economically viable;
  • The full development of the project would have an impact of less than 2% of the 2020 greenhouse gas emission targets set by the Government of Quebec for 2020;
  • The SEA suggests a variety of measures and best practices that can be implemented to address the environmental impacts of the project, considering that similar projects are being completed other places in the world.

Petrolia commends the authors of the SEA, as it was very comprehensive in nature and represents a reasonable approach to estimate the potential value of hydrocarbon development on Anticosti Island. Notwithstanding, reports such as these are very speculative in nature, due to the wide array of variables that need to be considered.

As previously announced, Anticosti Hydrocarbons completed the drilling of 12 stratigraphic survey wells on the Island in 2014 and 2015, which were taken into consideration in the SEA completed by the Government. Anticosti Hydrocarbons is planning, subject to the receipt of the necessary approvals, to drill and frack three horizontal wells in 2016. This drilling program will be a critical step towards understanding the hydrocarbon resource potential on Anticosti Island.

Petrolia notes that the Government's estimate of the relative proportion of gas (77.5%) to oil (22.5%) is largely based on estimates from comparable oil & gas basins and the actual proportions could vary from this estimate. In these other basins, the presence of gas is essential to ensuring the economic production of oil and is an important component of the value of the resources. It is important to highlight that this estimate of gas includes liquid hydrocarbons typically referred to as condensate. If these estimates prove to be correct, the project could produce a meaningful amount of oil, gas and condensate. The condensate is expected to consist mostly of butane, propane and ethane, which could add significant economic value to the project. 

Petrolia is excited about its interest in Anticosti Hydrocarbons because, according to the Government's studies, its permits are located in the area of the basin which is most likely to contain the liquids rich zone and best productive capacity. Anticosti Island continues to represent the largest and most prospective oil and gas project in the Province of Quebec.

"For the last several years, Petrolia is the only Quebec-based company that has taken concrete steps to advance this breakthrough project for the Province of Quebec. Before the signing of the agreements in 2014, we completed $5.8 million of work on the Island. In 2014, we negotiated and signed agreements for up to $100 million of work with partners, including the Government of Quebec, for the valorization of these permits and we remain the operators of this project. Since 2008, Petrolia has been closely linked to the success and advancement of the Anticosti project" stated Alexandre Gagnon, President and CEO of Petrolia. 

Petrolia is the company that holds the best portfolio of oil projects in the Province of Quebec. The hypothesis set forth in the studies published by the Government of Quebec for the additional potential for natural gas associated with the production of oil on Anticosti Island creates a fantastic opportunity for the economic development of the eastern region of Quebec, including Gaspésie and the North Shore of the St. Lawrence.

The full documentation can be accessed (in French only) at the following link:

About Pétrolia

Pétrolia is a junior oil and gas exploration company which owns interests in oil and gas licenses covering 16,000 km² (4 million acres), which represents almost 23% of the Québec territory under lease. The closing of a partnership on Anticosti Island has led to the creation of Anticosti Hydrocarbons L.P., a limited partnership in which Pétrolia holds a 21.7% interest. In order to carry out the project's operations, Pétrolia Anticosti Inc., a subsidiary of Pétrolia, was designated project operator. Pétrolia is a Québec company whose objective is to develop oil from here, by the people here, for here. Pétrolia has 80 345 195 shares issued and outstanding. North Shore of the St. Lawrence.

Oil and Gas Disclosure

The economic study was based on historical geological data and two separate independent resource estimates for the Macasty Formation on Anticosti Island prepared by Sproule and Associates Limited in 2015 and Netherland, Sewell & Associates in 2011 which, in combination, established a best estimate1 of the Total Unrisked Undiscovered Petroleum Initially-In-Place at approximately 43.0 billion barrels of oil equivalent (MMboe). "Best Estimate" means there is at least a 50% probability (P50) that the quantities actual in place is equal to or greater that the estimate. Total Unrisked Undiscovered Petroleum Initially-In-Place is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulation. It is that quantity of petroleum that is estimated, as a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. Undiscovered Petroleum Initially-In-Place (equivalent to Undiscovered Resources) are those quantities of petroleum that are estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as Prospective Resources, the remainder as Unrecoverable. Undiscovered resources carry discovery and development risks. The reported volumes are unrisked. There is no certainty that any portion of these resources will be discovered.. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources. The volumes have been reported as MMBOE to reflect the uncertainty of hydrocarbon type across the Island.. The term "boe" refers to barrels of oil equivalent. All calculations converting natural gas to crude oil equivalent have been made using a ratio of six mscf of natural gas to one barrel of crude equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six mscf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-looking statements

Certain statements made herein may constitute forward-looking statements. Forward-looking statements includes the characteristics of Anticosti LP's properties; exploration and development plans, including planned drilling and fracturing, timing of such plans and the number of jobs created as a result of these plans; strategies and objectives; and government support. These statements relate to future events or the future economic performance of Petrolia Inc. or Anticosti LP and carry known and unknown risks, uncertainties and other factors that may considerably affect its results, economic performance or accomplishments when considered in light of the content or implications or statements made by Petrolia Inc.. Actual events or results could be significantly different. Accordingly, undue reliance should not be placed on these forward-looking statements. Petrolia Inc. does not intend and undertakes no obligation to update these forward-looking statements.

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. 

Alexandre Gagnon
President and Chief Executive Officer

For Interviews
Jean-Francois Belleau
Director of Public and Governmental Affairs

Source: Marketwired (Canada) (November 3, 2015 - 7:43 AM EST)

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