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Monday 11 February, 2019

Mayan Energy Limited

Petroteq Energy Inc Update

RNS Number : 6523P
Mayan Energy Limited
11 February 2019
 

Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil and Gas 

 

11 February 2019

Mayan Energy Ltd ('Mayan' or 'the Company')

Update on investee company: Petroteq Energy Inc.

 

 Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to note the following update from TSX listed Petroteq Energy Inc ('Petroteq') (TSXVE: PQE OTC: PQEFF) regarding the Asphalt Ridge heavy oil sands project, Utah.  Mayan currently holds 1,035,233 shares in Petroteq Energy Inc. with an associated 1,035,233 3-year warrants at USD $0.90. 

 

Full Text of Petroteq's Release

 

Petroteq Energy Inc. (the "Company") (TSXV:PQE; OTC:PQEFF; FSE: PQCF), a fully integrated oil and gas company, is pleased to announce the execution of a definitive agreement for the acquisition of 50% of the operating rights and interests relating to oil sands under U.S. federal oil and gas leases encompassing approximately 8,480 gross acres (4,240 net acres, less royalty) in the State of Utah. The lands included in the leases are located in P.R. Springs and the Tar Sands Triangle, two areas that have been designated as "Special Tar Sands Areas" by the U.S. Bureau of Land Management.

 

The details of the acquisition are as follows: TMC Capital, LLC ("TMC"), an indirect wholly owned operating subsidiary of the Company, will acquire an undivided 50% interest in the operating rights (working interests) under a federal oil and gas lease located in P.R. Springs and five federal oil and gas leases located in the Tar Sands Triangle. Under this transaction, TMC will pay Momentum Asset Partners I, LLC, a Nevada limited liability company, total consideration of US$10.8 million, US$1.8 million payable in cash and US$9 million payable in shares, namely 15 million common shares of the Company, at a deemed value of US$0.60 per share, representing a premium of approximately 76% from the last closing price of the common shares.

 

According to a report titled "Evaluation of Contingent Resources" from Chapman Petroleum Engineering, Ltd. dated December 31, 2018 (the "Chapman Report"), the 50% interests in the P.R. Springs leases to be acquired by TMC are estimated to contain gross contingent resources of 45 million barrels of mineable oil/bitumen in place, with an "arithmetic average after risk" estimate, determined on a net basis (discounted by risk and royalty), of 20.38 million barrels of mineable oil/bitumen in place. Based on certain assumptions in the Chapman Report concerning forecasted oil prices and a recovery factor, the mineable resources that are attributable to the interests in the P.R. Spring lease to be acquired by TMC have an estimated "after risk" cash flow value of US$1.19 billion on an undiscounted basis, a cash flow value of US$153.2 million on a 10%/year discounted basis, and a cash flow value of US$86.2 million on a 15%/year discounted basis.

 

According to the Chapman Report, the 50% interests in the Tar Sands Triangle leases to be acquired by TMC are estimated to contain gross contingent resources of 41.3 million barrels of in situ oil/bitumen in place, with an "arithmetic average after risk" estimate, determined on a net basis (discounted by risk and royalty), of 20.7 million barrels of in situ oil/bitumen in place. No economic evaluation of the resources contained in the Tar Sands Triangle leases has been conducted.

 

The Chapman Report was prepared in compliance with the COGE Handbook and NI 51-101 - Standards of Disclosure for Oil and Gas Activities.

 

"Petroteq's disciplined approach to asset acquisition prioritizes future financial strength while creating alignment to the capabilities of our technology to enhance value by extracting surface oil sands heavy oil in an environmentally friendly, industry leading process. The low cost of capital required to acquire these assets not only increases the quality of Petroteq's assets, but is intended to allow the Company to leverage its technology and adjust capital spending to harvest these resource rich areas," said David Sealock, Chief Executive Officer.

 

"In light of the current environment, as we continue to work on our 2019 production plan and if oil pricing maintains its stabilization, Petroteq anticipates layering in production growth that supports our strategy to initiate production and leverage cash flow from operations. Donald Clark, our Chief Geologist, is currently working on the Resource Development Plan that will be issued this quarter," continued Mr. Sealock.

 

This acquisition is part of the Company's larger strategy of developing a long term strategic capability to produce oil for decades. Strategically, it makes sense for the Company to acquire assets now on a cost-effective basis, so that if valuations in the region rise, the Company will already have a large resource base to monetize without having to pay incrementally higher prices for land and mineral resources.

 

All securities issued pursuant to the above noted transaction will be subject to a four-month hold period. The transaction is ultimately subject to approval of the directors of the Company and the TSX Venture Exchange.

 

About Petroteq Energy Inc.

Petroteq is a fully integrated oil and gas company focused on the development and implementation of a new proprietary technology for oil extraction. The Company has an environmentally safe and sustainable technology for the extraction of heavy oil and bitumen from oil sands, oil shale deposits and shallow oil deposits. Petroteq is engaged in the development and implementation of its patented environmentally friendly heavy oil processing and extraction technologies. Our proprietary process produces zero greenhouse gas, zero waste and requires no high temperatures. Petroteq is currently focused on developing its oil sands resources and expanding production capacity at its Asphalt Ridge heavy oil extraction facility located near Vernal, Utah. For more information, visit www.Petroteq.energy.

 

**ENDS**

For further information visit www.mayanenergy.co.uk or contact the following:

 

Charlie Wood

Mayan Energy Ltd

+44 20 7236 1177

Roland Cornish

Beaumont Cornish Ltd

+44 20 7628 3396

James Biddle

Beaumont Cornish Ltd

+44 20 7628 3396

Frank Buhagiar

St Brides Partners Limited

+44 20 7236 1177

Gaby Jenner

St Brides Partners Limited

+44 20 7236 1177

Colin Rowbury

Novum Securities Limited

+44 20 7399 9400

 

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) North American based energy company.  It is actively pursuing a primary recovery oil strategy focused on re-stimulating wells within mature producing basins with immediate cash flow leveraging commercially available technologies and projects that are shallow, low risk with low levels of capex and infrastructure already in place.  It also remains interested in creating shareholder value by strategic investments in similar projects with high cash generative potential and by forming beneficial development partnerships that enable the use of pioneering and leading extraction technologies.

 


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