MOLORI ENERGY INC. TALKS HEDGING STRATEGY AND ANNOUNCES APPOINTMENT OF DEDICATED INVESTOR RELATIONS PROFESSIONAL
Borger, Texas --(Newsfile Corp. – June 21, 2017) Molori Energy Inc. (TSXV: MOL OTCQB: MOLOF) ("Molori" or the “Company”) announced that the Company alongside it’s operating partner Ponderosa Energy LLC has been proactively engaged in a comprehensive hedge program to mitigate exposure to short term swings in energy prices.
While increasing production to the partnership from 40 boepd* in June of 2016 to over 400 boepd to date through a systematic campaign of well work-overs and re-completions, Ponderosa in tandem with Molori has forward sold approximately 9000 barrels per month of oil and gas production at an average price of USD $49 per barrel (WTI) for a period of up to 18 months.
The strategy that Molori and Ponderosa are employing involves pre-selling production as it comes ‘online', with a mandate of fortifying cash flows and reducing the associated business risk and unstable cash flows associated with the volatility of short term fluctuations in global energy prices.
Theo Van Der Linde, chief financial officer of Molori, stated: “As Molori gears up for our previously announced plans to drill our first exploratory wells into the Red Cave formation, we are pleased to announce that in concert with our operating partner Ponderosa Energy, Molori has hedged a significant portion of the Company’s existing production. This strategy will provide Molori with the defensive foundation required to execute on the next stage of our growth. The capital from the Company’s recent financing coupled with the current hedges in place, will see that Molori remains well-positioned to continue the Company’s growth in production and reserves in spite of the recent softness in energy prices."
Molori Energy’s strategy is to consistently build its production and reserves in a cost-efficient manner through its well work over program, while at the same time develop Molori’s broad exposure to the promising Red Cave exploration and development play. The Company plans to drill the first of its wells into the Red Cave formation in July, 2017.
The Company also announced the engagement of Judy-Ann Pottinger of Vancouver, British Columbia, to assist in the Company's Investor Relations activities.
Molori will pay Ms. Pottinger a monthly fee of $8,000 for professional services. The engagement is for an initial six-month term with option to renew thereafter. Molori has granted Ms. Pottinger 100,000 stock options exercisable at a price of $0.26 for a period of 4 years in accordance with the Company’s stock option plan and a further 1,000,000 to Directors, Officers and Consultants of the Company under the same terms.
* Per BOE amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 MCF) of natural gas to one barrel (1 bbl) of crude oil. The BOE conversion ratio of 6 mcf to 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. Given that the value ratio based on the current price of natural gas as compared to oil is significantly different from the energy equivalent of 1:6, utilizing a conversion on a 1:6 basis may be misleading as an indication of value. The ratio of gas to oil was 70% gas and 30% oil in June 2016 and 40% gas and 60% oil in June 2017
Molori Energy Inc. is an oil and gas production company with current operations in the Texas Panhandle West Field. The Company owns a 25 percent working interest in certain leases located in the bifurcated Texas panhandle, operated by Texas-based independent oil and gas producer Ponderosa Energy, LLC (“Ponderosa”), This giant field was discovered in 1910 and expanded three years later to create one of the largest gas fields in the US The experienced management team at Molori is aggressively acquiring select properties which provide immediate cash flow and development opportunities, now and in the years ahead. Molori is seizing the opportunity, in the current oil & gas environment, to assemble oil and gas production now in the years ahead.
Director of Communications
Molori Energy Inc.
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Cautionary Notes Regarding Forward Looking Statements
This News Release contains forward-looking statements. Forward-looking statements include but are not limited to those with respect to the prices of oil and gas, the estimation of oil and gas resources and reserves, the realization of oil and gas reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, Government regulation of oil and gas operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of current exploration activities, conclusions or economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes or other risks of the oil & gas industry, delays in obtaining government approvals or financing or incompletion of development or construction activities, risks relating to the integration of acquisitions, to international operations, and to the prices of oil & gas. While the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.