Arctic Hunter Announces Corporate Overview
October 11, 2013 (Source: Arctic Hunter Energy Inc.) — Arctic Hunter Energy Inc. (TSX-V: AHU) (“Arctic Hunter” or the “Company”)is pleased to provide the following corporate highlights for Arctic Hunter’s operations during the year ended June 30, 2013, which include:
- Management has maintained a responsible growth strategy, which identifies the acquisition of low risk drilling locations and oil assets located in the provinces of Alberta & Saskatchewan, while maintaining and utilizing the Company’s favorable working capital position generated by cash flow from its wells. The Company continues to seek and acquire much larger and more sustainable exploration and drilling growth opportunities primarily in western Canada and abroad. Many oil & gas development opportunities have been reviewed and considered by management during 2013, but none of the opportunities presented have offered the potential returns attractive enough to offset the level of risk and capital required.
- As a result of the Company’s exploration activities the Company was able to maintain steady production from the Company’s heavy oil properties of approximately of 20 bbls per day, net to the company’s interest, and received oil revenues of $366, 933 CDN to the Company for fiscal 2013. Revenue for 2013 is down, with the decrease being driven by the volume decrease in its wells, lower average realized price for 2013 and terminated agreements with the sale of three of its producing wells in April 2013. The total revenue generated from the Company’s successful well production for the years, 2011, 2012 and 2013 has now exceeded $2,481,890 CDN. Management has taken the position that with the ongoing global credit crisis, the U.S Governments inability to resolve U.S. debt ceiling & government related issues, oil price volatility and continued weakness on the TSX Venture due to commodity price swings, to remain cautious and fiscally prudent. The Company will continue to take the necessary precautions to maintain its cash reserves, maintain stable production while continuing to identify the most appropriate opportunities presented to management, with the greatest upside and potential for sustainable growth.
- Arctic Hunter terminated its sub-participation agreements that it had entered into with Alberta Star Development (“Alberta Star”) in respect to certain heavy oil assets (Landrose, C-11, C-14, A-6 wells) that were sold to Petrocapita Oil & Gas L.P (“Petrocapita”) of Calgary, Alberta. The Company relinquished its interest in the lands to Alberta Star and was paid $102, 000 for the consideration. As a result of this transaction, the Company was able to eliminate some of the de-commissioning liabilities associated with these heavy oil assets. Petrocapita maintains a strong balance sheet, and was appointed Operator of the Company’s heavy oil assets situated in Saskatchewan.
- Revenue from the company’s heavy oil properties continues to be negatively impacted by the glut of oil in mid continental North America due to steady increased production in the Bakken, North Dakota, Alberta and Texas, and with insufficient pipeline capacity to transport this oil south to major markets. The price differential between heavy and light crude oil was unfavorable again, averaging $19.16 per bbl, compared to $31.96 per barrel in the third quarter 2013. During the months of April, May and June, the heavy oil differential averaged 25.2%, 14.6% and 21.3% respectively. The weaker price environment for heavy oil continues to be driven by a number of factors, which includes, reduced demand, scheduled and unscheduled refinery maintenance and Canadian oil being sold at a discount to the West Texas intermediate (WTI) benchmark crude oil price as rising production cannot find the necessary pipeline capacity. The discount to WTI has been even greater for the Company’s heavy oil production. The refiners’ posted prices are influenced by the US dollar WTI reference price, transportation costs, US dollar/ Canadian dollar exchange rates and the supply & demand of particular oil quality streams during the year.
- In July of 2012 the Company submitted a formal application for an “Open Door Bid” for the Ionnina Contract area, a 4,187 sq. km block located onshore in north western Greece, with a Joint Venture Partner. The application for exploration was reviewed by the Hellenic Republic Ministry of Environment Energy and Climate Change. The Greek Government awarded the bid on July 16, 2013, almost a year later after the Bid was submitted, to a consortium consisting of Energean Oil (80% and Operator), Petra Petroleum (20%) and Schlumberger as strategic technical partner.
- The Company continues to maintain a strong balance sheet with no debt and has maintained stable, daily heavy oil production revenue from its most productive existing well and property situated in Landrose, Saskatchewan.
- The Company is currently evaluating a number of domestic oil and gas drilling exploration opportunities for the remainder of 2013-14 and continues to be highly selective, while maintaining strict, responsible and sustainable growth with its domestic drilling and exploration strategies for 2013-14.
ABOUT ARCTIC HUNTER ENERGY
The Company is Canadian Oil & Gas exploration and development Company that acquires and finances the acquisition, exploration and development of oil and gas assets primarily in Western Canada. The Company is a junior heavy oil producer in the greater Lloydminster area of Alberta & Saskatchewan. The Company has maintained a stable production base since 2010, and is constantly reviewing future production and exploration opportunities through selective property acquisitions and identifying low risk exploration drilling activities.
The Company maintains a strong balance sheet and has a qualified management and has Oil & Gas team of professionals seasoned in field exploration, drilling. The Company has the resources and necessary manpower to develop its natural resource and production properties. The Company is committed to minimizing risk through the selective acquisition, exploration and development of petroleum and natural gas resource assets. The Company intends to increase its oil production and reserves through its exploration activities and strategic property acquisitions.
Neither the TSX Venture Exchange nor its Regulation Services Provider, (as the term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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