Company acquires acreage and production
from Chaparral Energy
VANCOUVER, May 27, 2015 /CNW/ - Jericho Oil Corporation
("Jericho" or the "Company") (TSX-V: JCO; OTCQX: JROOF), a
growth-oriented oil company engaged in the acquisition,
exploration, development and production of overlooked and
undervalued oil properties in the U.S., has signed a purchase and
sale agreement to acquire a 50% working interest in producing wells
and leaseholds in northeastern Oklahoma for a total cash consideration of
$762,500 from Chaparral Energy.
The 2,500 acre acquisition represents Jericho's second in the
northeastern Oklahoma region since
the beginning of 2015 and brings its total acreage position across
Kansas and Oklahoma to over 8,300 acres. The asset,
which produces approximately 80 gross barrels of oil equivalent per
day (to the 100% WI), is in areas complementary to Jericho's
existing operations in northeast Oklahoma. The acquisition
allows Jericho to purchase production (97% Oil, 3% Gas), reserves,
cash flow and equipment at an appreciable discount from the
underlying value of the asset.
"In an environment of lower oil prices and sellers generally not
willing to capitulate, we are pleased to be able to add such a
fundamentally sound asset to our portfolio. The acquisition
is consistent with Jericho's current strategy of capitalizing on
acquisition opportunities to enhance the quality of its asset base
throughout the commodity price cycle," Allen Wilson, CEO of Jericho, stated.
Overall, the asset consists of 17 producing well bores and 8
salt water disposal wells. Of the 17 producing well bores, 6
were horizontally drilled and completed, while the remaining wells
were drilled vertically. The wells are drilled into various
formations including the Mississippi Lime (the focus of the
horizontal drilling), Bartlesville, Skinner, Red Fork and
Cleveland.
In addition to adding high quality production and cash flow to
Jericho's portfolio, there are approximately 10-15 de-risked
vertical offset locations to the horizontal wells – many of which
were spotted and staked prior to the precipitous decline in the
price of oil. The six horizontal wells, individually, had initial
production rates in excess of 300
BOPD.
Jericho financed the transaction with available cash on hand and
continues to operate with no debt.
About Jericho Oil Corporation
Jericho is focused on growth through consistent, predictable and
repeatable high margin conventional oil production by bringing new
and proven technology to legacy, onshore basins in the U.S. Jericho
has acquired a 50% interest in over 8,300 acres in the
Mid-Continent and is actively seeking additional properties in the
region. For more information, please visit www.jerichooil.com.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward-looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and Canadian securities laws. There
can be no assurance that such statements will prove to be accurate
and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could
cause actual events and results to differ materially from Jericho's
expectations include risks related to the exploration stage of
Jericho's project; market fluctuations in prices for securities of
exploration stage companies; and uncertainties about the
availability of additional financing.
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.
SOURCE Jericho Oil Corporation
