By December 30, 2015 Read More →

Jericho Oil raising $6.929 million for Central Oklahoma wells, acreage

Jericho Oil looking to raise money to fund acquisition of producing wells and prospective acreage in Oklahoma

JerichoJericho Oil Corporation has announced it is proceeding with a non-brokered private placement of approximately 17,323,610 units at a price of $0.40 per unit to raise total gross proceeds of approximately $6.929 million.

Each unit will be comprised of one common share and one half warrant with each full Warrant being exercisable into one additional share at a price of $0.60 per share for a period of two years from closing.

Proceeds of the offering will be used immediately towards the acquisition of producing wells and prospective acreage in central Oklahoma, previously outlined by the company.

Central Oklahoma acquisition highlights:

  • Jericho Oil acquires 50% average working interest and will assume operatorship upon closing
  • The Central Oklahoma asset is comprised of ~50 producing wells and 30,000 net acres
  • Reserves are ~90% Proved Developed and ~80% Oil
    • Reserve-to-production ratio of ~8.5 years
  • Net Proved Developed Producing reserves of ~1.25 MMboe (625m net boe to Jericho’s interest) acquired at ~$10.08 per barrel
  • Average 3Q15 net production of 427 boepd (213 net boepd to Jericho’s interest) acquired at $30,458 per flowing Boe
    • Increases Jericho’s production by 225%
    • 88% Oil, 12% Gas
  • Oil production priced at an LTM differential to WTI of ~$3.25/bbl

The acquisition is located in Seminole, Pottawatomie, Lincoln and Payne County across five contiguous land packages.  The Central Oklahoma acreage spans a highly prolific region with prospectivity in high-quality source rocks (e.g., Woodford Shale) and multiple productive reservoirs including, but not limited to: Hunton, Mississippi Lime, Red Fork and Skinner.

Ryan Breen, director of A&D, says that low oil prices have dried up capital and credit has become scarce, which creates “illiquidity”  creates opportunities to acquire highly distressed assets.

“This Central Oklahoma acquisition demonstrates our commitment to acquiring high-quality assets that have generally been burdened by distressed corporate capital structures with positive cash flow and future drilling potential at appreciable discounts to their long-term value,” said Breen.

No finders’ fees or commissions are being paid in connection with the offering. Closing of the offering is subject to final TSX Venture Exchange approval.

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