Crocotta Energy Inc.

Crocotta Energy Inc.

June 05, 2012 06:00 ET

Crocotta Energy Provides Operational Update

CALGARY, ALBERTA--(Marketwire - June 5, 2012) - Crocotta Energy Inc. ("Crocotta" or the "Company") (TSX:CTA) is pleased to provide an Operations Update.


Current production is estimated to be approximately 8,000 boepd (67% gas; 33% light oil and natural gas liquids). Crocotta estimates Q212 production will average approximately 7,300 boepd. The current production includes certain Bluesky and Montney wells producing at restricted rates, however, such additional capacity will be used to partially offset declines in Q312.

Given current production levels, Crocotta is confident it will meet or exceed its production guidance of 7,350 boepd for average 2012 production and its exit rate of 8,500 boepd.



In Q212, Crocotta has drilled 1 (1.0 net) Bluesky horizontal well and is currently drilling 1 (0.5 net) Cardium oil horizontal well and has licensed 1 (0.60 net) Cardium oil horizontal well that is expected to spud in mid-June. Completion of 2 (1.6 net) Bluesky liquids-rich gas wells will be deferred until late September or early October to allocate capital to other projects.

In Q312, Crocotta has budgeted to drill and complete an additional 3 (1.8 net) Cardium wells. These wells will help to prove up approximately 30 net Cardium oil locations on the Northeast portion of Crocotta's Edson acreage.

Oil Exploration Areas

At Mitsue, Crocotta is currently drilling a horizontal multi-frac oil well targeting light oil in the Gilwood formation and has drilled and cased a vertical oil test at Chigwell targeting light oil in the Wabamun formation. Crocotta has assembled significant land positions in both areas to expand the projects if they are successful.


Crocotta estimates current net debt at less than $45 million. This compares to a bank credit facility of $100 million and estimated annualized cash flow of approximately $50 million based on current strip pricing.

Crocotta has hedges in place for 800 boepd of oil at WTI $US104.38 for the balance of 2012 and 10 mmcf/d of natural gas for calendar 2013 at $2.71 per gigajoule.

Crocotta will closely monitor pricing and cash flow and adjust capital expenditures as necessary to ensure net debt does not exceed normal ratios and leave substantial undrawn credit.


Crocotta is well positioned to show accelerated and material growth through the exploitation of its large proven resource base at Edson (for Cardium oil and Bluesky liquids-rich natural gas) and in the Montney (natural gas at Dawson/Sunrise) and also have significant financial flexibility to react to opportunities as they arise.

Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.

More particularly and without limitation, this document contains forward looking statements and information relating to the Company's oil, NGLs and natural gas production, cash flow, net debt and capital programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

BOE Conversions

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 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.

Contact Information

  • Crocotta Energy Inc.
    Robert Zakresky
    President and Chief Executive Officer
    (403) 538-3736

    Crocotta Energy Inc.
    Nolan Chicoine
    Vice President, Finance and Chief Financial Officer
    (403) 538-3738

    Crocotta Energy Inc.
    700, 639 -5th Ave SW
    Calgary, Alberta T2P 0M9
    (403) 538-3737
    (403) 538-3735 (FAX)