Vancouver, British Columbia–(Newsfile Corp. – February 28, 2017) – Molori Energy Inc. (TSXV: MOL) (OTCQB: MOLOF) (“Molori” or the “Company”) is pleased to report the release of its annual consolidated financial statements and the notes the year ended October 31, 2016, together with the auditors’ report thereon (the “2016 Financial Statements”) and the related management’s discussion and analysis for the year ended October 31, 2016 (the “2016 MD&A”).
- On June 6, 2016, Molori closed on the purchase of a 25% working interest in the oil and gas production from certain leases owned by Texas-based Ponderosa Energy, LLC. (“Ponderosa”). In conjunction with the purchase, Molori committed USD $1,000,000 in working capital towards a program to complete workovers on the Texas-based leases in order to increase production. Ponderosa, a domestic USA oil and gas production company, is the operator on the leases and is presently focused on aggregating and developing shallow conventional oil reserves in Texas. Ponderosa purchased these leases when oil prices dipped below $30 per barrel from distressed operators with highly-leveraged balance sheets and an inability to fund operations. Molori and Ponderosa have chosen to collectively pursue assets which specifically exhibit the following properties: shallow reservoir, low geologic risk, moderate decline rates, and existing infrastructure.
- From June to October 2016, Ponderosa spent approximately US$420,000 on reworking and returning to production over 30 wells on the leases it shares with Molori. That saw the average barrels of oil equivalent per day (“BOEPD”)* of 49 in June, increase to an average of 126 BOEPD for the 5 month-period.
- Ponderosa produced a total of 5,546 barrels of oil (“bbl”) and 82,201 Mcf in gas during the 5 month period, June to October. Combined, that translates into 19,246 BOEPD for the 5 month period and US$640,000 in gross revenue.
- Lease operating expenses amounted to US$13.15 barrels of oil equivalent (“BOE”), for the 5 month period, June to October 2016.
- Molori recorded a gain of $3,773,283 on the write down of its Subsidiary, Lion Petroleum. As a result, total income for the year was $2,293,821 as compared to a loss of $13,650,583 in the prior year.
- In addition to purchasing the 25% working interest in Ponderosa, the Company reduced its current liabilities by $1,656,500.
- The Company will continue to strengthen its balance sheet in the 2017 fiscal year.
- In partnership with Ponderosa, and in order to grow production, Molori is actively pursuing opportunities to acquire additional leases in the Panhandle area.
- The Company is awaiting completion in the next few weeks of a revised NI 51-101 reserve report, which it anticipates will reflect an increase in reserves as a result of the additional wells being brought on line.
- Ponderosa’s anticipates being at 500+ BOEPD in next several weeks. February average production was approximately 400 BOEPD resulting in over 11,000 barrels of oil being produced for the month.
Joel Dumaresq, CEO of Molori stated: “We are extremely pleased with the efforts of our operating partner — Ponderosa Energy – and in particular with the growth in production. We feel that the results of the past 6 months, validate our strategy of acquiring non-operating wells and bringing them into production in a cost-efficient manner. We are actively considering our options for increasing our ownership of these assets.”
* Per BOE amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 MCF) of natural gas to one barrel (1 bbl) of crude oil. The 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. Given that the value ratio based on the current price of natural gas as compared to oil is significantly different from the energy equivalent of 1:6, utilizing a conversion on a 1:6 basis may be misleading as an indication of value.
Molori Energy Inc. is an oil and gas production company with current operations in the Texas Panhandle West Field. The Company owns a 25 percent working interest in certain leases located in the bifurcated Texas panhandle, operated by Texas-based independent oil and gas producer Ponderosa Energy, LLC (“Ponderosa”), This giant field was discovered in 1910 and expanded three years later to create one of the largest gas fields in the US The experienced management team at Molori is aggressively acquiring select properties which provide immediate cash flow and development opportunities, now and in the years ahead. Molori is seizing the opportunity, in the current oil & gas environment, to assemble oil and gas production now in the years ahead.
CEO and Director
Molori Energy Inc.
(604) 336 3193
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Cautionary Notes Regarding Forward Looking Statements
This News Release contains forward-looking statements. Forward-looking statements include but are not limited to those with respect to the prices of oil and gas, the estimation of oil and gas resources and reserves, the realization of oil and gas reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, Government regulation of oil and gas operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of current exploration activities, conclusions or economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labor disputes or other risks of the oil & gas industry, delays in obtaining government approvals or financing or incompletion of development or construction activities, risks relating to the integration of acquisitions, to international operations, and to the prices of oil & gas. While the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking 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 statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.