Company acquires acreage and production from Chaparral Energy
VANCOUVER, May 27, 2015 /PRNewswire/ - Jericho Oil Corporation ("Jericho" or the "Company") (TSX-V: JCO; OTCQX: JROOF), a growth-oriented oil company engaged in the acquisition, exploration, development and production of overlooked and undervalued oil properties in the U.S., has signed a purchase and sale agreement to acquire a 50% working interest in producing wells and leaseholds in northeastern Oklahoma for a total cash consideration of $762,500 from Chaparral Energy.
The 2,500 acre acquisition represents Jericho's second in the northeastern Oklahoma region since the beginning of 2015 and brings its total acreage position across Kansas and Oklahoma to over 8,300 acres. The asset, which produces approximately 80 gross barrels of oil equivalent per day (to the 100% WI), is in areas complementary to Jericho's existing operations in northeast Oklahoma. The acquisition allows Jericho to purchase production (97% Oil, 3% Gas), reserves, cash flow and equipment at an appreciable discount from the underlying value of the asset.
"In an environment of lower oil prices and sellers generally not willing to capitulate, we are pleased to be able to add such a fundamentally sound asset to our portfolio. The acquisition is consistent with Jericho's current strategy of capitalizing on acquisition opportunities to enhance the quality of its asset base throughout the commodity price cycle," Allen Wilson, CEO of Jericho, stated.
Overall, the asset consists of 17 producing well bores and 8 salt water disposal wells. Of the 17 producing well bores, 6 were horizontally drilled and completed, while the remaining wells were drilled vertically. The wells are drilled into various formations including the Mississippi Lime (the focus of the horizontal drilling), Bartlesville, Skinner, Red Fork and Cleveland.
In addition to adding high quality production and cash flow to Jericho's portfolio, there are approximately 10-15 de-risked vertical offset locations to the horizontal wells – many of which were spotted and staked prior to the precipitous decline in the price of oil. The six horizontal wells, individually, had initial production rates in excess of 300 BOPD.
Jericho financed the transaction with available cash on hand and continues to operate with no debt.
About Jericho Oil Corporation
Jericho is focused on growth through consistent, predictable and repeatable high margin conventional oil production by bringing new and proven technology to legacy, onshore basins in the U.S. Jericho has acquired a 50% interest in over 8,300 acres in the Mid-Continent and is actively seeking additional properties in the region. For more information, please visit www.jerichooil.com.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. 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. Important factors that could cause actual events and results to differ materially from Jericho's expectations include risks related to the exploration stage of Jericho's project; market fluctuations in prices for securities of exploration stage companies; and uncertainties about the availability of additional financing.
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.
SOURCE Jericho Oil Corporation