Strategic Oil & Gas Ltd. Tests Five New Muskeg Wells and Announces First Quarter 2017 Financial and Operating Results
Strategic Oil & Gas Ltd. ("Strategic" or the "Company") (TSX VENTURE:SOG) announces results from its first quarter drilling program and reports financial and operating results for the three months ended March 31, 2017. Detailed results are presented in Strategic's interim unaudited consolidated financial statements and related Management's Discussion and Analysis ("MD&A") which will be available through the Company's website at www.sogoil.com and on SEDAR at www.sedar.com.
Highlights for the first quarter include:
PERFORMANCE OVERVIEW, STRATEGY AND OUTLOOK
During the first quarter Strategic focused on the execution of its $30 million capital spending plan for the first half of 2017, which included drilling five horizontal Muskeg wells and the construction of a four kilometre pipeline to tie-in the 14-35 Muskeg well drilled in the first quarter of 2016. The pipeline project was completed in early February 2017.
The 2017 Muskeg wells were drilled with 1,900 metre lateral lengths and 20 stage completions, similar to the wells drilled in the second half of 2016. To date all five wells drilled in the first quarter have been completed and are being tied-in. Test rates from the newly drilled wells over a 48 hour period ranged from 300 boe/d to 800 boe/d (80% oil). Once tied-in, production from the new wells will be limited by pipeline pressure to approximately 1,500 boe/d.
The Company continued its cost reduction efforts in the current quarter, reducing operating costs and general and administrative ("G&A") expenses by $0.2 million and $0.1 million, respectively from the first quarter of 2016. Strategic expects costs operating and G&A expenses to continue to drop on a per boe basis as production levels rise, increasing the Company's netbacks.
Strategic raised $5.3 million through a private placement in January 2017 and had $38.6 million in working capital as of March 31, 2017. The Company intends to commence a $24 million third quarter capital program which includes drilling up to five additional horizontal wells. The Company has cash resources to continue to drill along its high-impact Muskeg development corridor at West Marlowe as part of the execution of its growth strategy in the second half of 2017.
Strategic is a junior oil and gas company committed to becoming a premier northern oil and gas operator by exploiting its light oil assets primarily in northern Alberta. The Company relies on its extensive subsurface and reservoir experience to develop its asset base and grow production and cash flows while managing risk. The Company maintains control over its resource base through high working interest ownership in wells, construction and operation of its own processing facilities and a significant undeveloped land and opportunity base. Strategic's primary operating area is at Marlowe, Alberta. Strategic's common shares trade on the TSX Venture Exchange under the symbol SOG.
Additional information is also available at www.sogoil.com
SOURCE: Strategic Oil & Gas Ltd.
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