Moore County, Texas — (Newsfile Corp. – May 7, 2018) Molori Energy Inc. (TSXV: MOL OTC: MOLOF) (“Molori” or the “Company”) announces today that the Company has signed an LOI (“Letter of Intent”) to purchase a 100% working interest of which Molori will be the operator of record in approximately 30,000 gross acres of land in conjunction with its Red Cave oil and gas development play in Moore County, Texas.
The approximately 30,000 acres in Moore County, Texas is held by production (HBP). The purchase includes 34 operated Red Cave wells, 1 salt water disposal well, 4 Red Cave wells that have not been fracked, along with 8 wells currently producing.
As a first priority in conjunction with the acquisition of the “Wolf” acreage, Molori has contracted an independent, third party technical report on Wolf’s “Baker 39” lease, which comprises 562 net acres of the 30,000 acres
The 16 existing Baker wells were drilled in the early 1990’s with initial production (IP’s) between 50-100 boepd per well. Furthermore, the Baker Lease is ready for immediate production with a producing tank battery and good existing infrastructure.
Based upon its definitive review of the Red Cave in Moore County, Management believes that the Baker 39 Lease on its own has the potential to be a company maker as a result of the strong IP’s and dozens of well locations. A full analysis of the Baker 39 Lease is nearing completion and will be available shortly.
Upon closing, which is estimated to occur on or before June 30, 2018, Molori has agreed to pay USD $1,700,000 for a 100% working interest in existing oil and gas wells, salt water disposal wells, together with all interest in properties, facilities and equipment owned by Wolf Energy, LLC.
Commented Molori CEO Joel Dumaresq, “This land acquisition is the culmination of over a year of work in defining and assembling the Red Cave acreage we believe to be most prospective and assembling acreage. Our initial focus is upon the Baker 39 Lease which while only 562 acres of the overall 30,000 acres, provides infill drilling potential for as many as 55 wells upon 10-acre spacing. With 8 wells on this lease demonstrating historical IP’s of between 50 and 100 boepd, we are excited to commence the work on the Baker lease, the next phase of Molori’s development program.”
Upon completion of the acquisition of this 30,000 acre parcel, and when added to its current acreage, Molori will have access to several hundred well locations upon 10-acre spacing and double that number should the Company eventually move to 5-acre spacing. Management of Molori believes that the shallow, low cost, high-recycle rate of these Red Cave wells is what strongly differentiates this opportunity.
Closing on the acquisition of the Wolf acreage is conditional upon routine due diligence, Molori Board approval along with all required regulatory approvals.
* 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. The ratio of gas to oil is 22% gas and 78% as reported.
Molori Energy Inc. is an oil and gas production company with current operations in the Texas Panhandle West Field. The focus of the Company’s exploration and development arm is the underdeveloped Red Cave formation, where Molori has engaged in a broad drilling program to assess and develop its acreage. Molori’s business model is to deliver sustainable growth in shareholder value by focusing on exploiting its existing reserves, commercializing and developing discoveries and pursuing selective acquisitions.
Molori’s operating team, based in Borger, Texas have extensive experience in the oil and gas industry in the Texas Panhandle. The Company believes that the area represents a significant hydrocarbon basin in a well-developed region. By employing leading-edge exploration and frac techniques, Molori believes that the Company is well positioned to increase its production and reserves and further benefit from the opportunities that exist in the Texas Panhandle region.
For further information, please visit the Company’s website at www.molorienergy.com or contact
CEO and Director
Molori Energy Inc.
(604) 336 3193
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 NEW RELEASE.
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.