February 2, 2016 - 6:00 AM EST
Print Email Article Font Down Font Up Charts

Quattro Increases Estimated Recoverable Resources in Saskatchewan to 18 Million Barrels From 120 Million Barrels of Original Oil in Place (OOIP) ** and Receives Proposal for a Term Loan of $20 Million

CALGARY, Alberta, Feb. 02, 2016 (GLOBE NEWSWIRE) -- Quattro Exploration and Production Ltd. (TSX-V:QXP)  ("Quattro" or the "Company") is pleased to announce an increase in its recoverable reserves in Saskatchewan to 18 million barrels of oil from an estimated 120 million barrels of original oil in place (OOIP)**.

Furthermore, in December of 2015, the Company entered into discussions with a Tier One lender who had earlier in the year previously indicated an interest in the financing of Quattro.  Following the addition by Quattro of a number of synergistic acquisitions to its operations over the past 12 months, the Company is pleased to report that it has received a draft proposal from a Saskatchewan-based institutional lender for the funding of a $20 million term facility, with competitive fixed term interest rates as low as 5.45%, amortized over a period of 10 years.

“During what is expected to be a challenging year in 2016 for the industry, the Company continues to work on further improvements in liquidity, in combination with its continuing efforts to maintain a strong balance.  The closing of this financing in combination with its diversified revenue stream, is the foundation for the Company reaching its target of maintaining a debt to equity ratio of less than 1:1, by the 3rd quarter of 2016 including all accrued long term liabilities, while increasing its working capital to more than 2:1,” said Leonard Van Betuw, President and CEO.

Quattro and its lenders continue to discuss the terms of closing and upon the successful conclusion of these negotiations, funding of the facility is proposed to occur in March of 2016.

On February 1, 2016 the Company also closed its previously announced acquisition of a 100% interest in certain oil and gas production, facilities and lands in west central Saskatchewan from an Alberta-based resource company for an aggregate purchase price of $4,150,000. The purchase price was paid through the issuance of 35,000 non-voting, Class C, series 3 preferred shares at a deemed price of $100 per share (“Preferred Shares”) and $650,000 in cash. The properties are located in the region of Superb, Saskatchewan, where production averaged 160 bbls per day in 2015 (the “Properties”).

The effective date for the acquisition was December 31, 2015.

The Preferred Shares are priced at $100 per share and pay an annual preferred dividend of $3.50 per share. The holder will have the right on the anniversary of the 2nd year of issuance to convert the Preferred Shares into Class A common shares at a ratio of 40 Class A shares for each Preferred Share converted, valuing the Quattro Class A common shares received at a deemed price of $2.50 per share. 

“The closing of this acquisition of oil production, at a discount to current oil and natural gas pricing, the additional prospective lands and the extensive 100% owned and operated facilities in Saskatchewan, positions Quattro with the potential to collectively reach its initial economic target of more than 1,000 boe/d in 2016, from its combination of exploratory and producing properties in Saskatchewan,” said Leonard Van Betuw, President and CEO.

“The Company’s existing 100% interests at Wood Mountain, Rangeview and Divide, in addition to the recently closed acquisition at Superb provides three diverse areas of economic concentration of conventional producing and shut-in production, facilities and un-booked recoverable resources totaling an estimated 18 million barrels**, based on an initial conservative recovery rate of 15%. These resources are supported by 3 strategically positioned facilities in Saskatchewan owned by Quattro, collectively capable of processing all raw production and water disposal into up to 6,000 bbls./day of marketable oil from an estimated 120 million barrels of Original Oil In Place**”.

“Upon the consolidation of this Acquisition into Quattro’s plans in Saskatchewan, it is anticipated that Quattro’s operations in Saskatchewan will contribute $3 million in operating income of a corporately projected $10.8 million in 2016, growing to $6 million of $16.2 million in 2017 based on a gradual recovery in oil prices to more than US $35/bbl. WTI in 2017,” said Mr. Van Betuw. 

**Internally estimated by the Company as defined under NI 51-101 and the COGE handbook.

About Quattro Exploration and Production Ltd.

Quattro Exploration and Production Ltd. (“QXP”) continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada.  Our diversified core areas target a low risk production base focused on providing the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Canada and Central America.  The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.


This release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

BOE presentation:

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Trading in the securities of Quattro Exploration & Production Ltd. should be considered highly speculative. 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.


Leonard Van Betuw
President and Chief Executive Officer
Office (403) 984-3917 Ext.102
Direct Line (587) 228-7070
[email protected]


Tianda Dranchuk
Business Development
Office (403) 984-3917 Ext.107
[email protected]

Primary Logo

Source: GlobeNewswire (February 2, 2016 - 6:00 AM EST)

News by QuoteMedia

Legal Notice