June 25, 2019 - 7:03 AM EDT
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Cuda Oil and Gas Inc. Announces Private Placement, Another Financial Milestone for Its Light Oil Project in the Powder River Basin, Wyoming

Calgary, Alberta--(Newsfile Corp. - June 25, 2019) - Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of investment dealers for an equity offering to raise up to $8 million on a commercially reasonable efforts private placement basis (the "Offering"). The syndicate is co-led by KES 7 Capital Inc. ("KES 7") and Eight Capital and includes Seaport Global Securities LLC and Cormark Securities Inc. (collectively, the "Agents").

Pursuant to the Offering, Cuda plans to issue up to 16,000,000 units (the "Units") at a price of $0.50 per Unit. Each Unit will consist of one common share (a "Common Share") plus one-half (1/2) Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will be exercisable for one Common Share at a price of $0.60 per share for a term of 24 months from closing. The Agents are entitled to a cash commission of 6% of the gross proceeds of the Offering. In addition, the Company has granted the Agents an over-allotment option, exercisable for a period of 30 days from closing, to sell additional Units representing up to 15% of the base Offering, which, if exercised in full, would result in aggregate gross proceeds of $9.2 million.

The Company anticipates using a portion of the net proceeds of the Offering, together with the additional credit facility to be made available pursuant to the re-financing announced on June 5, 2019, to further fund and execute the natural gas miscible flood program (the "Program") at the Barron Flats (Deep) Federal Unit ("BFU") in Converse County, Wyoming. The balance of the net proceeds from the Offering will be used for development drilling, working capital and general corporate purposes. The Offering is expected to close on or about July 18, 2019, or such other date or dates as mutually agreed to by the Company and the Agents, acting reasonably. The Offering is subject to certain conditions including, but not limited to, the approval of the TSX Venture Exchange. The Common Shares and Warrants will be subject to a four month hold period.

The Offering is an integral milestone in support of the 2019 capital plan to fund the development of the significant light oil reserves assigned to the Company at year-end 2018. The reserves evaluation was prepared in accordance with the definitions, standards and procedures contained in the COGE Handbook and NI 51-101 - Standards of Disclosure for Oil and Gas Activities, by the Company's independent reserves evaluator, Ryder Scott. Summary reserves information for the Company's Proven Developed Producing ("PDP") and Proved Non Producing ("PNP"), Total Proved ("1P"), and Proved plus Probable ("2P") Reserves is provided below.

Reserves at December 31, 2018

  • PDP + PNP is 1,534 mboe (62 % oil & liquids)
  • 1P is 4,949 mboe (84 % oil & liquids)
  • 2P is 14,571 mboe (84% oil & liquids)

Reserve Value at December 31, 2018 (before tax discounted at 10%)

  • PDP + PNP is $26.8 Million or $1.22 per basic Common Share
  • 1P is $77.8 Million or $3.55 per basic Common Share 
  • 2P is $191.6 Million or $8.74 per basic Common Share

Cuda also recently acquired the Cole Creek Unit consisting of 11,000 gross acres (3,630 acres net) which can support a 48 well (16.7 net) project that can be developed with unconventional horizontal technology.

The Powder River Basin, specifically Converse County, continues to see higher activity levels from major oil and gas E&P companies and private equity backed firms. The stack of horizontal oil targets continues to deliver positive results. The Company has recognized that several additional horizontal opportunities exist below the conventional Shannon Sand on the land base, specifically within the Frontier, Niobrara and Muddy formations. These opportunities provide for further resource development on Company lands.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly, may not be offered or sold to, or for the account or benefit of, persons in the United States or to U.S. Persons (as such term is defined in Regulation S under the U.S. Securities Act), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities to, or for the account or benefit of, persons in the United States or U.S. Persons.

About Cuda Oil and Gas Inc.

Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long term focus on large, light oil resource based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.

For further information please contact:

Glenn Dawson
President and Chief Executive Officer
Cuda Oil and Gas Inc.
(403) 454-0862

Forward-Looking Information

This news release contains forward-looking information. All statements other than statements of historical fact included in this news release are forward-looking information. In particular, this news release includes forward-looking information relating to: (i) the completion of the Offering, including the over-allotment option, and the terms and timing thereof; (ii) the amount and use of proceeds of the Offering; (iii) the availability of credit facilities; (iv) exploration and development activities; (v) the Company's natural gas miscible flood program; and (vi) reserve estimates and reserve values which by their nature involve the implied assessment that the reserves can be profitably produced. Forward-looking information is based on assumptions relating to: (i) the negotiation and execution of definitive transaction documents; (ii) the Company obtaining all necessary third party and regulatory approvals; (iii) assumptions of management relating to the Company's oil and gas properties, market conditions, access to capital and operational and financial results. Risk factors that could prevent forward-looking information from being realized include changes in market conditions, actual results of current exploration and development activities, ongoing permitting requirements, operational risks, risks associated with drilling and completions, uncertainty of geological and technical data, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of oil and natural gas. Although Cuda has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Oil and Gas Advisories

Estimates of the net present value of future net revenue attributable to reserves do not represent fair market value.

"BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


To view the source version of this press release, please visit https://www.newsfilecorp.com/release/45862

Source: Newsfile Corp. (June 25, 2019 - 7:03 AM EDT)

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