HOC Hunter Technology Corp

VANCOUVER, April 26, 2018 /CNW/ - Hunter Oil Corp. (TSX-V: HOC; OTCQX: HOILF) (the "Company") is pleased to announce the results of an independent evaluation of the Company's oil and gas reserves for the 2017 year-end.

The evaluation of the Company's reserves in the Permian Basin San Andres formation of the Chaveroo and Milnesand Fields in New Mexico, USA was conducted by Cawley, Gillespie & Associates, Inc. in accordance with the definitions, standards and procedures set out in the Canadian Oil and Gas Evaluation Handbook ("COGE") and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101").

Year-End 2017 Operations Activity

In 2017, the Company continued to advance its core assets in New Mexico. The Company also added 376 adjacent acres to its leaseholdings through New Mexico State Land Office lease auction and direct acquisition. The Company's total acreage position is over 23,000 acres.  Importantly, the acreage is essentially contiguous, 100% operated by Hunter which allows greater flexibility in future development.

In 2017, the Company's Agreed Compliance Order ("ACO") with the New Mexico Oil Conservation Division was extended another year. The ACO recognizes the Company's successful efforts in reducing the number of inactive wells and allows the Company to obtain drilling permits to proceed with its development plans. 

2017 Gross Reserves Summary

Total Proved Reserves of 15.6 million Barrels of Oil Equivalent (BOEs)

Proved plus Probable Reserves of 22.2 million BOEs

Proved plus Probable plus Possible Reserves of 40.3 million BOEs

Net Present Value of Reserves discounted at 10%

Total Proved Reserves before tax of U.S. $ 215.9 million

Proved plus Probable Reserves before tax of U.S. $ 372.0 million

Proved plus Probable plus Possible Reserves of U.S. $ 829.7 million

The above reserve cases represent a full horizontal redevelopment of the company's acreage in the San Andres formation. The total Proved reserves are attributed to the drilling of 91 horizontal wells over the next 6 years. The Probable reserves are attributed to incremental volumes of the 91 horizontal wells and the drilling of 10 additional wells. Possible reserves are attributed to incremental volumes of the 101 horizontal wells and the drilling of an additional 11 wells. The wells in the Company's report (the "Report") are planned at 160-acre spacing (4 wells per section) on approximately 23,000 acres.   

The tables set forth below summarize the Company's oil and natural gas reserves, and the net present values before and after income tax of future net revenue for the Company's reserves using forecast prices and costs assumptions.

Note: All dollar values are expressed in U.S. dollars (M$ = thousands of U.S. Dollars)

The Company's reserves are derived from non-conventional tight-oil activities from which gas and natural gas liquids may be produced as by-products.  "Tight-oil" means crude oil (a) contained in dense organic-rich rocks, including low-permeability shales, siltstones and carbonates, in which the crude oil is primarily contained in microscopic pore spaces that are poorly connected to one another, and (b) that typically requires the use of hydraulic fracturing to achieve economic production rates.

The Company is not required to pay income taxes for its most recently completed financial year. Subject to current production and financial assumptions, the Company may have an income tax liability in 2021. The After Income Tax net present values reflect the tax burden on the Company's field interests. The financial statements and the management's discussion and analysis ("MD&A") of the Company should be consulted for further information.

Readers are referred to the Company's Statement of Reserves Data and Other Oil & Gas Information dated December 31, 2017, prepared in accordance with the definitions, standards and procedures set out in the COGE Handbook and NI 51-101, which can be found on the Company's website or the SEDAR website at http://www.sedar.com.

BOEs/boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: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. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of provided plus probable plus possible reserves. The present value of estimated future net revenues referred to herein does not represent fair market value and should not be construed as the current market value of estimated crude oil and natural gas reserves attributable to the Company's properties.

About Hunter Oil Corp.

Hunter Oil owns and operates two large, historic oil fields in the Permian Basin of Eastern New Mexico - the Milnesand and Chaveroo fields, which together comprise in excess of 23,000 gross acres, substantially held by production. Historical production of these two fields is approximately 40 million barrels. Hunter has engineered a horizontal redevelopment of the San Andres productive zones. The Company plans to unlock the value in these resource-rich fields by leveraging existing infrastructure, lowering operating costs and increasing efficiencies of its operations.

ON BEHALF OF THE BOARD OF DIRECTORS

Andrew Hromyk
President and CEO
+1 (604) 689-3355

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including statements regarding estimates of reserves and future net revenue, expectations regarding additional reserves and statements regarding Chaveroo and Milnesand wells development, including plans, anticipated results and timing. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information.   

Forward-looking information regarding Chaveroo and Milnesand well development and expectations regarding additional reserves are based on plans and estimates of management and interpretations of exploration information by the Company's exploration team at the date the information is provided and is subject to several factors and assumptions of management. These assumptions include: that required regulatory approvals will be available when required, that no unforeseen delays, unexpected geological or other effects, equipment failures, permitting delays or labor or contract disputes or shortages are encountered, and that the development plans of the Company will not change. Risks include: the risk that anticipated results and estimated costs will not be consistent with managements' expectations, the Company will not be able to obtain and provide the information necessary to secure regulatory approvals required, that unexpected geological results are encountered and that equipment failures, permitting delays or labor or contract disputes or shortages are encountered.

Information on other important economic factors or uncertainties that may affect components of the reserves data and the other statements in this release are contained in the Company's Statement of Reserves Data and Other Oil & Gas Information dated December 31, 2017, and the Company's MD&A under "Risk Factors", which are available under the Company's profile at www.SEDAR.com.

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SOURCE Hunter Oil Corp.