Vancouver, British Columbia--(Newsfile Corp. – April 11, 2017) - Molori Energy Inc. (TSXV: MOL) (OTCQB: MOLOF) ("Molori" or the “Company”) is pleased to announce that its partner, Ponderosa Energy LLC, has optioned an undivided interest in approximately 4,000 acres with Red Cave rights in Moore County, Texas.
The new leases are within a 30 minute drive of its other Panhandle properties, but offer significant blue sky development opportunities. The Red Cave formation, an historically productive reservoir, is approximately 2,500 feet deep and roughly 700 feet shallower than Molori’s Brown Dolomite/Granite Wash production. Similar to the Permian Basin, modern frac technology and other completion techniques have recently unlocked the reservoir. The combined companies will test development to the Red Cave zone, which if successful, will add hundreds of economic drilling locations to Molori’s already healthy inventory of PDNP wells. Molori and Ponderosa plan to spud a first well within the next 90 days. Each well is expected to cost roughly USD $250,000.
The core focus of the Molori/Ponderosa partnership remains old field redevelopment that has already resulted in production increase from 40 barrels of oil equivalent (“BOEPD”)* since June 2016 to over 400 BOEPD now, an increase in 1P (Total Proven Reserves) from USD $5.15 million to USD $26.9 million as outlined in an updated NI 51-101 reserve report effective January 1, 2017.
Joel Dumaresq, CEO stated, “Our core redevelopment business provides us with a solid cash flow base from which to launch into other growth strategies. The Red Cave is an exciting opportunity to accelerate the growth in our reserves, which we can undertake in the vicinity of our present leases without undermining our current operations.”
The company further announces a non-brokered private placement offering (the "Private Placement") of up to 7,000,000 units ("Units") at a price of $0.30 per Unit to raise aggregate gross proceeds of up to $2,100,000. Each Unit will be comprised of one common share and half common share purchase warrant. Each full warrant gives the holder the right to purchase one additional common share of Molori at an exercise price of $0.50 for two years following the closing of the Private Placement. Completion of the Private Placement is subject to the approval of the TSX Venture Exchange.
Proceeds of the financing will be used to fund the acquisition of certain leases owned and operated by Ponderosa Energy, LLC (See March 3, 2017 news release) as well as fund its 25% working interest in the continued well workover program and the drilling of the Red Cave formation.
Molori holds a 25% working interest in certain leases owned by Borger, Texas based Ponderosa Energy. For further detail on the Red Cave opportunity, consult Molori Energy’s website at www.molorienergy.com
* 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 approximately 50% gas and 50% oil currently.
Molori Energy Inc. is an oil and gas production company with current operations in the Texas Panhandle. Founded in 2011, the experienced management team 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 in nearby and politically safe jurisdictions. Molori is pursuing a business plan, whereby the Company either purchases producing oil and gas assets at highly attractive rates, or in some cases simply takes on existing assets by way of purchasing or assuming default notes from small regional lenders and institutions.
CEO and Director
Molori Energy Inc.
(604) 336 3193
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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.