CALGARY, ALBERTA--(Marketwired - Feb. 2, 2017) -
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Blackbird Energy Inc. (TSX VENTURE:BBI) ("Blackbird" or the "Company") is pleased to announce that it has entered into a purchase and sale agreement with Paramount Resources Ltd. ("Paramount") for the acquisition of 8 gross sections of Montney rights (2.8 net) for total consideration of 5 million Blackbird common shares (the "Paramount Acquisition"), and that the Company has acquired 3 gross sections of Montney rights (3 net) through a recent crown land sale (collectively, the "Acquisitions"). These lands (collectively, the "Acquisition Lands") are contiguous with Blackbird's existing lands and increase Blackbird's Montney rights at Elmworth / Pipestone to 102 gross sections (96.8 net). Blackbird is also pleased to announce that it has achieved initial Elmworth / Pipestone Montney production.
Overview of the Acquisition Lands
See Figure 1 below for a map of Blackbird's current lands and the Acquisition Lands. In total, the Acquisition Lands are comprised of 11 gross sections of Montney rights (5.8 net) which are on strike geologically with Blackbird's existing lands. The Acquisition Lands are located south of the Wapiti River in close proximity to the Company's existing infrastructure, and they are contiguous with Blackbird's existing land block.
To view "Figure 1 - Blackbird's Current Lands and the Acquisition Lands" associated with this news release, please visit the following link: http://www.marketwire.com/library/20170201-1084670.png
Strategic Rationale for the Acquisitions
The strategic rationale for the Acquisitions is as follows:
- Post-closing of the Paramount Acquisition, Blackbird will hold 102 gross sections of Montney rights (96.8 net) in the prolific Elmworth / Pipestone corridor, with significant blocks of land both north and south of the Wapiti River;
- Combined with Blackbird's current Elmworth / Pipestone lands, the Acquisition Lands form a large contiguous block of lands south of the Wapiti River in close proximity to Blackbird's existing infrastructure;
- Management estimates that the Acquisitions add between 88 and 264 gross drilling locations (46 - 139 net) to Blackbird's drilling inventory south of the Wapiti River (calculated using one mile laterals, two to four intervals per acquired section, and four to six wells per interval). These locations increase the Company's ultimate reserves and production potential;
- Combined with Blackbird's current production, the additional drilling inventory located south of the Wapiti River will contribute to Blackbird's current and future processing and take-away commitments upon the construction of an eastern pipeline gathering system;
- Combined with Blackbird's current Elmworth / Pipestone drilling inventory, the additional drilling inventory provided by the Acquisitions will help to achieve the scale required to execute large-scale processing and take-away agreements; and
- The Paramount Acquisition allows the Company to increase its Montney land holdings at Elmworth / Pipestone while maintaining its balance sheet strength.
Closing of the Paramount Acquisition is subject to TSX Venture Exchange acceptance and certain other conditions customary for acquisitions of this nature. The anticipated closing date for the Paramount Acquisition is February 15, 2017.
Initial Elmworth / Pipestone Montney Production
On Monday, January 30, 2017 Blackbird achieved initial Montney production at Elmworth / Pipestone. Blackbird's 5-26, 2-20, 02/2-20 and 6-26 wells are being phased into production over the next several days. The 3-28 well will be tied-in subsequent to a period of soaking, which is meant to imbibe load fluid into the reservoir and reduce water hauling and testing costs. The 2-20/11-9 well will be completed in March, 2017 and then soaked in a similar manner to the 3-28 well. The 2-20/11-9 well will be tied-in upon the construction of an eastern pipeline gathering system.
Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Elmworth, near Grande Prairie, Alberta.
For more information please view our Corporate Presentation at www.blackbirdenergyinc.com.
Advisories and Forward-Looking Information
This press release contains forward-looking statements or information (collectively referred to herein as "forward-looking statements"). Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements and are not guarantees of future performance of the Company. Such forward-looking statements include but are not limited to: the anticipated timing for closing of the Paramount Acquisition and the benefits to be derived from the addition of the Acquisition Lands including specifically the number of potential drilling locations on the Acquisition Lands, the ability of the Acquisition Lands to contribute to Blackbird's current processing and take-away commitments, the ability for the Acquisition Lands to provide the scale required to execute large-scale processing and take-away agreements, and the current strength of Blackbird's balance sheet and the ability to maintain such strength; the phasing into production of the 5-26, 2-20, 02/2-20 and 6-26 wells, the planned tie-in for the 3-28 well and the timing for completion and tie-in of the 2-20/11-9 well and the construction of an eastern pipeline gathering system. Forward-looking statements are based on assumptions including but not limited to the successful closing of the Acquisition.
No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates, and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic and business conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with oil and gas exploration, development and production including drilling and completion risks, (3) the price of and demand for oil and gas and their effect on the economics of oil and gas exploration, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems, (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, and (8) other factors beyond the Company's control. Should one or more of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. Readers are cautioned that the foregoing list of risks, uncertainties, and other factors is not exhaustive. Unpredictable or unknown factors not discussed could also have material adverse effects on forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent on other factors, and the Company's course of action would depend on its assessment of the future considering all information then available. All forward-looking statements in this press release are expressly qualified in their entirety by these cautionary statements. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
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