CUT BANK, MT, Nov. 19, 2013 /PRNewswire/ - Mountainview Energy Ltd. (TSXV: MVW) ("Mountainview" or the "Company") is pleased to announce that its board of directors has approved a two-well winter program which drilling will be comprised of two additional Three Forks wells in the Company's 12 Gage Project located in Divide County, North Dakota. Mountainview has contracted with Ensign Rig #118 for the drilling program and projects well costs, including drilling, completion and tie-in to be approximately $6.5-7.0 million (gross) per well. The Company plans to drill these two wells from one pad which will result in significant cost savings. The following table illustrates the expected location and working interests in the two-well program:
Sec. 14 & 23, T162N-R101W, Divide County, ND
Sec. 26 & 35, T162N-R101W, Divide County, ND
The Company plans to move the drilling rig to the Reistad location within the next week. Upon completion of the winter drilling program, the Company will hold approximately 46% of its acreage in its 12 Gage Project based on production.
To fund this increased capital program, which also includes the payment of certain additional fees and expenses and the acquisition of additional acreage in the 12 Gage Project, Mountainview's wholly-owned subsidiary Mountain Divide, LLC ("Mountain Divide"), which holds Mountainview's interest in the 12 Gage project, will draw an additional $14.75 million on its $75 million dollar senior secured credit facility (the "Facility"). Including this draw, the total amount drawn to date under the Facility will be $48.5 million. Pursuant to the Facility, the lender has been assigned a 39% after pay-out net profits interest (the "NPI") in all of Mountain Divide's oil and gas properties within Divide County, Montana. The NPI is defined as all revenues received by Mountain Divide, less all operating costs, production taxes, and capital costs incurred by Mountain Divide. Payments on the NPI shall commence upon repayment in full of the outstanding Facility but will automatically reduce to 20% once the lender achieves a 1.65 x return on investment as stated in the definitive agreements underlying the Facility.
Mountainview Energy Ltd. is a public oil and gas company listed on the TSX Venture Exchange, with a primary focus on the exploration, production and development of the Bakken and Three Forks Shale in the Williston Basin and the South Alberta Bakken.
Certain information contained in this press release constitutes forward-looking statements, including, without limitation, information related to the use of proceeds from the Facility, the intention to complete the two-well winter drilling program, Mountainview's working interest in certain wells, the percentage of acreage held by production, the contents of certain documents related to the Facility, potential drilling locations, Mountainview's operational plans and the timing of operations on certain wells. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control including the impact of general economic conditions, the ability of working interest partners to elect to go "non-consent" with respect to the wells in the two-well winter drilling program or choosing to not participate in such wells which would result in Mountainview being required to fund additional amounts, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the lack of availability of qualified service providers, personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals and the risk that actual results will vary from the results forecasted and such variations may be material. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company's actual results, performance or achievement could differ materially from those expressed in or implied by these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or if any of them do so, what benefits the Company will derive therefrom.
The forward-looking statements contained in this press release are made as of the date of this press release. Mountainview disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Additionally, Mountainview undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Mountainview Energy Ltd.