Edge Resources Inc. Announces Production Increase and Drilling Program Update,
Revised Banking Facilities and Resignation of
CALGARY, ALBERTA -- (Marketwired) -- 10/29/13 -- Edge Resources Inc.
(TSX VENTURE:EDE)(AIM:EDG) ("Edge" or the "Company"), is pleased to
provide another production update on its vertical Eye Hill East well
and, as a result, the intention to commence a further drilling
program. In addition, the Company has renewed its credit facilities
(the "Credit Facilities") with National Bank of Canada. The Company
also announces the resignation of Vishnu Reddy from the Board.
As previously reported, production from the vertical well in Eye Hill
East ("Asset East") had increased from 60 to 90 and then to over 100
barrels of oil per day ("bopd") with indications that further
production increases were possible, as the well was producing at
Production from this well last month averaged greater than 130 bopd
with peak production of over 150 bopd, still while under restricted
rates. The water-to-oil ratio is very low for this area and has been
steadily decreasing to below 40% today. Additionally, pressure from
the well has been steadily increasing - in fact, the well has seen a
300% pressure increase over the last month of production compared to
the first month of production, indicating additional deliverability
is potentially possible.
Brad Nichol, President and CEO of Edge commented, "We are extremely
pleased with these production results, especially in comparison to
other pools in the area and particularly given the large number of
similar drilling locations remaining on Edge's 100% owned lands. Our
operations team has successfully utilized some new techniques
designed to generate low water-to-oil ratios and very high production
rates, while preserving long-term reservoir integrity." Nichol added,
"In the tight capital markets we're experiencing today, projects like
the Eye Hill East discovery that typically generate three to four
times the initial invested capital with a payback of less than six
months, are critical to generating shareholder value. With up to an
additional 100 potential wells to drill at Eye Hill, the company
anticipates being able to fund future wells by recycling the surplus
cash generated by newly drilled wells."
All of the Company's three core assets continue to be cash flow
positive; however, the Company is pursuing higher profitability and
growth from oil-based prospects, such as Eye Hill, while its natural
gas properties are allowed to decline naturally. Following the record
results reported in the previous quarter, the Company expects the
upcoming financial quarter to show continued improvement, based on
high netbacks and increased cash flow.
Under the revised loan agreement, National Bank of Canada has agreed
to renew its main demand revolving facility at $8 million (previously
$12 million). The facility bears interest at the bank's prime rate
plus 3.0% per annum (previously prime rate plus 0.75% per annum). The
new facility and interest rate reflects the current lending
environment in Canada, which has resulted in revisions to Canadian
lending models and practices. The Credit Facilities are secured
against the assets of the Company. As of today's date, the Company
has drawn $7.0 million on the Credit Facility and, reflecting
increasing oil production and positive cash flow, the Company expects
future usage of the Credit Facility to decrease.
Additionally, the Company has chosen to cancel its $6.5 million
Acquisition and Development Line of Credit ("Acquisition Line"),
which will result in an immediate cost saving.
Nichol commented, "The Acquisition Line was appealing when it was
first offered; however, the practicality of utilizing that type of
facility in today's market is just not justified."
Based on the exceptional production results in Eye Hill, the Company
is planning a winter drilling program, having licensed a number of
wells to enable a minimum of two locations to be drilled in Eye Hill
prior to the end of the year. With the production results at Eye Hill
considerably exceeding the Company's expectations, the Company has
planned the next wells in close proximity to the previously drilled
Nichol commented, "Our intent is to minimize typical developmental
risks in order to duplicate the results we've seen in Eye Hill to
date. Our 3D seismic and the previously-drilled wells lead us to
believe that future drilling opportunities in Eye Hill should provide
us with similar well results. We currently have up to 100 additional
drilling locations in Eye Hill, which provides us with a tremendous
runway on which to grow significant shareholder value."
Resignation of Director:
Vishnu Reddy, a director of the Company, has been required to
relinquish all corporate directorships as a condition of accepting a
new role and opportunity at one of the world's leading banks and
financial services institutions in London, England. The Company has
enjoyed and benefited from Mr. Reddy's relatively short time as a
director at Edge and wishes him all the best in his future endeavors.
The Company intends to appoint an additional director as and when a
suitable candidate is identified.
For more information, visit the company website: www.edgeres.com
About Edge Resources Inc.
Edge Resources is focused on developing a balanced portfolio of oil
and natural gas assets from properties in Alberta and Saskatchewan,
Canada. Management has consistently focused on:
1. Shallow, conventional programs that typically offer reduced capital,
operational and geological risks
2. Very high or 100% working interests and fully operated assets
3. Pools and horizons with exceptionally high reserves in place
The management team's very high drilling success rate is based on the
safe, efficient deployment of capital and a proven ability to
efficiently execute in shallow formations, which gives Edge Resources
a sustainable, low-cost, competitive advantage.
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address future production,
reserve potential, exploration drilling, exploitation activities and
events or developments that the Company expects are forward-looking
statements. Although the Company believes the expectations expressed
in such forward looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance
and actual results or developments may differ materially from those
in the forward-looking statements. Factors that could cause actual
results to differ materially from those in forward looking statements
include market prices, exploitation and exploration successes,
continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned that
any such statements are not guarantees of future performance and
those actual results or developments may differ materially from those
projected in the forward-looking statements. For more information on
the Company, Investors should review the Company's registered filings
which are available at www.sedar.com.
This news release shall not constitute an offer to sell or the
solicitation of any offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The secu
rities offered have
not been and will not be registered under the U.S. Securities Act of
1933, as amended, and may not be offered or sold in the United States
absent registration or applicable exemption from the registration
requirements of the U.S. Securities Act and applicable state
Trading in the securities of Edge Resources Inc. should be considered
highly speculative. 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.
Brad Nichol - President & CEO
Phone: +1 (403) 767 9905
Phone +1 (778) 918-8384
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