CALGARY, March 18 /CNW/ - Gallic Energy Ltd. (TSXV: GLC) ("Gallic" or "Company") is pleased to announce it has entered into an arm's length letter of intent agreement with Sahara Energy Ltd. (TSXV: SAH) ("Sahara") to negotiate the acquisition by Gallic of Sahara's Alberta and Saskatchewan properties (the "Acquisition") for consideration of approximately 13,500,000 class A common shares of Gallic and the assumption of $500,000 of Sahara's secured debt. Gallic has made a refundable deposited of $50,000 under the terms of the letter of intent, to be applied against the purchase price at closing. The letter of intent also contemplates the appointment of one additional director to the board of directors of Gallic in conjunction with the Acquisition, who will be a nominee of Sahara.
The Acquisition is subject to the completion of due diligence and negotiation of a formal agreement, as well as customary closing conditions and the receipt of all applicable regulatory and TSX Venture Exchange approval, as well as applicable Gallic disinterested shareholder approval in accordance with TSX Venture Exchange requirements.
The properties currently produce approximately 60 boe/d of low risk heavy oil in the greater Lloydminster area. These assets align with Gallic's strategy to acquire and consolidate low risk oil and gas properties to bring immediate production, cashflow and reserves to the Company.
Key attributes of the properties are:
- Current production of approximately 60 boe/d of heavy oil and gas
production from 5 one hundred percent working interest wells and
6 gross (1.6 net) non-operated wells;
- Approximately 4900 gross (2180 net) developed acreage;
- Approximately 8345 gross (3925 net) undeveloped acreage;
- An inventory of 4 low risk development drilling locations;
- Approximately 10 suspended wells with reactivation opportunities;
Mr. Mark Woods, Gallic's President and COO commented, "This property acquisition is expected to bring immediate production and low risk development opportunities and additional team strength which compliments the Gallic team. These assets combined with our previously announced acquisition of Oklahoma assets positions the Company well for future production, reserves and cashflow growth".
Gallic is also currently finalizing negotiations on its formal agreements to acquire the Oklahoma properties, as previously announced, and expects that a definitive agreement will be signed shortly with closing expected within the next month.
Gallic Energy Ltd. has 38,939,154 class A shares outstanding, and trades on the TSX Venture Exchange under the symbol GLC.
This press release contains forward-looking statements. Any statements that are contained in this press release that are not statements of historical fact may be considered forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the negotiation of a formal agreement for the acquisition, the terms of such formal agreement, the closing or completion of the acquisition, the beneficial impact of the acquisition on Gallic and Gallic's assessment of future plans and operations, expectations of future production, cash flow and earnings.
The forward-looking statements contained in this document are based on certain expectations and assumptions made by Gallic, including: (i) with respect to the anticipated completion of the acquisitions, expectations and assumptions concerning the timing and receipt of all applicable shareholder, court, and regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the transactions and (ii) with respect to the anticipated beneficial impact of the acquisitions on Gallic, expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices.
Although Gallic believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Gallic can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These risks include, but are not limited to: risks associated with the oil and gas industry in general (e.g. 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 reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses and health, safety and environmental risks), acquisitions, commodity price and exchange rate fluctuations and uncertainties resulting from competition from other producers and ability to access sufficient capital from internal and external sources. There is also risk that the closing of the acquisitions could be delayed if Gallic is not able to obtain the necessary regulatory, stock exchange and applicable shareholder approvals on the timelines it has planned. The acquisitions will not be completed at all if these approvals are not obtained or any other conditions to closing are not satisfied. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Gallic's operations and/or financial results are included in Gallic's reports on file with Canadian securities regulatory authorities.
The forward-looking statements contained in this press release are made as of the date hereof and Gallic 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.
MEANING OF BOE
When used in this press release, boe means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boepd means barrel of oil per day.
In this press release: (i) mmboe means million boe; (ii) boe/d or boepd means boe per day; (iii) bbls/d means barrels per day; (iv) mcf means thousand cubic fee; (v) mmcf means million cubic feet; (vi) mcf/d or mcfd means thousand cubic feet per day; and (vii) mmdf/d or mmcfd means million cubic feet per day.
Neither 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.
SOURCE Gallic Energy Ltd.
For further information: For further information: Mark Woods, P.Eng., President and Chief Operating Officer, Gallic Energy Ltd., Tel: (403) 263-1105, Fax: (403) 265-4514, firstname.lastname@example.org