CALGARY, ALBERTA--(Marketwired - Feb. 15, 2017) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
Petrocapita Income Trust (CSE:PCE.UN)(CSE:PCE.UN.CN) ("Petrocapita" or the "Trust") announces that it has closed a Purchase and Sale Agreement ("PSA") on February 13, 2017 for 10 wells and associated production equipment in the Kitscoty area of Alberta from Twin Butte Energy Ltd. ("Twin Butte") through Twin Butte's Receiver Manager, FTI Consulting Canada Inc. ("FTI") for $21,825.29 (plus or minus any adjustments pursuant to the PSA post-closing). The Trust estimates future abandonment and reclamation obligations associated with these assets of approximately $485,000. The effective date of the transaction is December 1, 2016.
About the Transaction
This acquisition compliments the Trust's original 9 wells and associated production equipment, a water disposal facility, and 0.8 km of flowlines and 7 wells with associated production equipment from Twin Butte in April 2015; and the acquisition of 3 wells with associated production equipment from Sahara Energy Ltd. in September 2016, all completed in the same Mannville pool with a cumulative recovery to date of less than 5%. With a 100% interest in 29 wells and a central disposal facility, the Trust believes it is positioned to substantially improve recovery and production in the area.
Details related to the Trust's reserves and facilities valuations and secured convertible debenture closings to date related to the acquisition and development capital have been filed with the Canadian Securities Exchange (www.theCSE.com).
Petrocapita Income Trust is a Specified Investment Flow Through trust developing and acquiring heavy oil production and infrastructure assets in the Lloydminster area of east central Alberta and west central Saskatchewan through its wholly owned subsidiary, Petrocapita Oil and Gas LP. Petrocapita owns or has interest in 445 gross (426.3 net) oil wells, 89 gross (20 net) gas wells, 19 produced water disposal facilities, 3 custom oil processing facilities, 3 natural gas compressor stations, 72.75 km in pipelines, oilwell service rigs, fluid haul tractors and trailers, motor graders, and wellsite processing equipment. It is seeking accretive opportunities to acquire both oil production and complimentary midstream assets during a cyclical low in the oil and gas markets.
Forward-Looking Information and Statements
This news release contains certain forward-looking information as defined under applicable securities legislation. All statements, other than statements of historical facts, with respect to activities, circumstances, events, outcomes and other matters that Petrocapita forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information. In particular, forward-looking information contained in this news release includes, but is not limited to, information and statements concerning the magnitude of abandonment and reclamation obligations associated with the acquired assets, and the ability of the Trust to improve recovery and production from its assets in the Kitscoty area of Alberta.
The forward-looking information provided in this news release is based on management's current beliefs, expectations and assumptions, based on currently available information as to future events (including the outcome and timing thereof). Petrocapita cautions that assumptions have been made regarding the magnitude of abandonment and reclamation obligations associated with the acquired assets, and the ability of the Trust to improve recovery and production from its assets in the Kitscoty area of Alberta, all of which are subject to all of the risks and uncertainties normally incident to the development, production, reclamation and abandonment of oil and gas assets. These risks include, but are not limited to: unanticipated operational, development and abandonment/reclamation issues; general economic, market and business conditions; the loss of key personnel; the failure to realize the benefits of acquisitions made; unforeseen liabilities and obligations; adverse regulatory, royalty or tax changes; and other risks as described in documents and reports that Petrocapita files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Petrocapita's actual results and plans to differ materially from those contained in the forward-looking information.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current estimates, assumptions and projections are valid. All forward-looking information speaks only as of the date of this news release, and Petrocapita assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Petrocapita's periodic filings on SEDAR (www.sedar.com) that discuss in further detail the factors that could cause future results to be different than contemplated in this news release.