Greenfields Petroleum Corporation Announces 2015 Budget for Bahar Project in Azerbaijan
HOUSTON, TEXAS--(Marketwired - Jan. 29, 2015) -
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Greenfields Petroleum Corporation ("Greenfields" or the "Company") (TSX VENTURE:GNF)(TSX VENTURE:GNF.DB), an independent exploration and production company with assets in Azerbaijan, is pleased to announce that the operating company of the Bahar project, Bahar Energy Operating Company ("BEOC" or the "Operator"), continues work in its redevelopment of the Gum Deniz and Bahar fields in the Bahar ERDPSA, Azerbaijan. BEOC has announced a 2015 budget for the Bahar project, including gross operating costs of $37.8 million and gross capital costs of $31.0 million. This budget is focused on continued growth of oil and gas production through workovers and recompletions on the oil and gas fields.
Gross field production for 2014 averaged approximately 26.6 mmcf/d and 1,351 bbl/d or 5,778 boe/d. Gross field production was approximately 22.4 mmcf/d and 1,206 bbl/d or 4,938 boe/d in Q4 2014 due to the suspension of drilling in Q2 attributable to the Drilling Contractor failing to maintain the necessary rig insurance. The 2015 budget anticipates average production of approximately 29.6 mmcf/d and 1,475 bbl/d or 6,408 boe/d. Workovers and recompletions continue to effectively add production in both the Gum Deniz and Bahar fields during the suspension of drilling. In the near term, the Operator is planning to access a crane barge for the installation of equipment and materials to allow three additional gas well workovers to proceed in the coming months.
The 3-D seismic survey continued through January 2015. It is anticipated that the Operator will complete the survey in February with approximately 96 square kilometers of the survey acquired. This 3-D seismic will be processed on an expedited basis by PSG Kahzar in Baku for use in targeting additional development well take points in the Gum Deniz oil field. The Operator intends to tender for drilling rigs in mid-2015 to support an active drilling program in 2016.
Furthermore, an agreement has been reached in principal with regard to a new gas sales contract for the sale of Bahar gas for a term of five (5) years, with sales price continuing at USD$3.96 per mcf.
John Harkins, President and CEO of Greenfields, stated that "The 2015 budget allows the Bahar project to provide adequate positive cash flows to fund the projects on-going operating costs and capital programs in the current oil price environment below $50 per barrel. We anticipate that once our partners' ownership interest in Bahar Energy Limited is resolved and funding as required under Joint Operating Agreement is provided by all of the contractor parties, the project should be self-funding in 2015. Although our focus remains on long term oil production growth from the project, the recent five year extension of our gas sales contract through December 2019 provides strong gas sales in the near term for the project."
Greenfields has agreed to issue an aggregate of 55,685 common shares of the Company ("Common Shares") to certain directors of the Company in satisfaction of director fees payable to such directors in the aggregate amount of CDN$55,685 (USD$48,000). The deemed price per Common Share to be issued pursuant to these transactions is CDN$1.00 (USD$0.862), being the closing price of the Common Shares on the TSX Venture Exchange on December 31, 2014, the date that the debt became payable. The issuance of the Common Shares is subject to the approval of the TSX Venture Exchange. The Common Shares will be subject to a four-month hold period from the date of issuance.
In addition, the Company has issued 6,000 Common Shares to an officer pursuant to an existing agreement with such officer related to performance objectives. The Company received conditional acceptance of the TSX Venture Exchange with respect to such issuance on January 23, 2015. The Common Shares are subject to a four-month hold period from the date of issuance. The deemed price per Common Share issued is CDN$0.89 (USD$0.72), being the closing price of the Common Shares on the TSX Venture Exchange on January 23, 2015.
About Greenfields Petroleum Corporation
Greenfields is a junior oil and natural gas corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.
This press release contains forward-looking statements. More particularly, this press release may include, but is not limited to, statements concerning: the capital expenditure budget of the Company, drilling and completion plans and the expected timing thereof, seismic acquisition and processing, production and the approval of the TSX Venture Exchange with respect to the issuance of Common Shares. In addition, the use of any of the words "initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate", "believe", "should", "forecast", "future", "continue", "may", "expect", and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the success of optimization and efficiency improvement projects, the availability of capital, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, general economic conditions, availability of required equipment and services, weather conditions and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company 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 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), commodity price and exchange rate fluctuations, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect the Company's operations and financial results are included under the headings "Risk Factors" in Greenfield's Annual Information Form, its Management Information Circular and similar headings in the Company's Management's Discussion & Analysis which may be viewed on www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and the Company 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.
Notes to Oil and Gas Disclosures
Barrels Oil Equivalent or "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf: 1bbl is typically used in oil and gas reporting and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The volumes disclosed in this press release use a 6 mcf: 1bbl conversion ratio.
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.