Elkwater Resources Ltd.
TSX VENTURE : ELW

March 17, 2011 16:52 ET

Elkwater Resources Ltd. Closes Acquisition of Oil and Gas Assets

CALGARY, ALBERTA--(Marketwire - March 17, 2011) - ELKWATER RESOURCES LTD. ("Elkwater" or the "Company") (TSX VENTURE:ELW) announces that it has closed its previously announced acquisition of producing oil and gas assets primarily located in the Lashburn and Suffield areas of Saskatchewan and the Pembina and Ewing Lake areas of Alberta. The purchase price was $5 million cash, subject to final closing adjustments, and was funded using cash on hand and an expanded bank credit facility. The transaction has an effective date of December 1, 2010. Elkwater will also acquire approximately $11 million in income tax resource pools with the transaction.

The acquisition increases the Company's production to an estimated net 280 boepd, comprised of approximately 165 bopd oil and NGLs and 115 boepd natural gas, and approximately one half of the production is operated. Post closing of the acquisition, the Company's debt/working capital deficiency is estimated at $3.75 million. Elkwater currently has 14,138,965 shares outstanding.

This press release contains "forward-looking information", within the meaning of applicable Canadian securities legislation, including but not limited to, statements with respect to: final closing adjustments of the acquisition; income tax resource pools; reserve estimates; estimates regarding current or future production; estimates of debt and working capital deficiency; and the future financial and operating performance of the Company's assets and its projects.

Forward-looking information is frequently characterized by words such as "expect", "schedule", "estimate", "approximate", "intend", "anticipate", "believe", and other similar words. These statements are only predictions and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social risks and uncertainties; risks relating to oil and gas exploration and exploitation activities; oil and gas prices; acquisition risks; risks relating to greater resources, and delays in obtaining regulatory approvals. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such 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 information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A 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. All boe conversions in this press release are derived by converting gas to oil according to this 6 mcf to 1 bbl ratio.

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.

Contact Information

  • Elkwater Resources Ltd.
    Don J. Brown
    President
    (403) 262-0242