HOUSTON, TEXAS – Hillcrest Petroleum Ltd. (the “Company” or “Hillcrest”) (TSX-V: HRH US Symbol: HLRTF) is pleased to update our shareholders on corporate developments and current activities.
As of March 15th, the Company’s current average daily working interest production from all assets is 244 barrels of oil per day (“bopd”) and 816 thousand cubic feet of gas per day (“mcfgpd”). The gas is equal to 54 barrels of oil equivalent per day (“boepd”) using a revenue basis of 15 mcf of gas to equal one barrel of oil.
Gulf of Mexico Production
For the week ending March 15th 2015, daily average working interest production from Hillcrest GOM Inc., a wholly owned subsidiary of Hillcrest that was acquired on 19th December 2014 and with operations in the shallow water regions of the Gulf of Mexico, was approximately 198 bopd and 364 mcfgpd. Production was primarily from the Eugene Island 32 Field, offshore Louisiana, where production remains cash positive net of Lease Operating Expense even at current product prices.
In addition to existing production, low cost well work-over and maintenance programs have been, and will be, undertaken in order to maintain production volumes. A number of infill development well locations have been identified, and these hold the potential to increase working interest production by several hundred barrels of oil per day if successful. The Company and the operator of the field are monitoring the oil price with the objective of drilling these wells at the appropriate time. As previously stated, all parties will continue to work together in order to progress and optimize developmental drilling programs and to realize additional operational cost savings.
Onshore Production – Newton County, Texas
In Newton County Texas, work-over and/or re-completion operations have been completed on two wells but have been suspended, pending review, on a third. Work-overs on the Donner #2 and Brown #1 well have resulted in current positive production and sales. Work-over efforts on the Donner #4 have been temporarily suspended, pending review and agreement by the working interest partners and contract operator, on the next steps to be followed. The Donner #4 well had primarily produced gas for 8 months following its completion in April of 2014. In early December, sand entered the well bore causing the well to be temporarily shut-in. Solutions such as a gravel pack and further perforations are being reviewed with a decision to be made within the next few weeks.
The current weekly average working interest production from the Donner and Brown wells is 46 bopd and 452 mcfgpd. The gas is equal to 30 boepd using a revenue basis of 15 mcf of gas to equal one barrel of oil.
Name Change, Rebranding and Exposure
As announced on March 11th, 2015, the Company has changed its name to Hillcrest Petroleum Ltd. in an effort to clearly distinguish it as an energy company. To complement the name change, the Company will be launching a new website, www.hillcrestpetroleum.com, which is expected to be live in early April. The name change and rebranding is to be completed before a limited marketing campaign starting in mid-April where the Company will initially focus its marketing efforts on areas in the United States that may have an appetite to review and support an undervalued oil producer with growth plans such as Hillcrest.
Hillcrest has continued its objective of growing the corporate value by searching for, reviewing and potentially acquiring additional producing petroleum assets with room to grow through further exploration and development. The current commodity price cycle has created an environment within the industry where we believe value can be acquired through the purchase of distressed or underappreciated assets. Hillcrest has identified and had preliminary discussions with potential financial backing from US based groups for new projects. Accordingly, the Company will focus on acquisitions that can be financed with financial instruments based on reserve value rather than relying solely on the issuance of equity.
“Further to the acquisition of our Gulf of Mexico assets, Hillcrest continues to produce both oil and gas from all assets at positive economic levels” states Don Currie, the Company’s CEO and Chairman. “Our work-overs in both Texas and the Gulf of Mexico have continued to provide positive results and we expect to have the Donner #4 plan set within the next few weeks which, if successful, may further increase the Company’s daily production. In addition, we continue to seek and evaluate further producing acquisitions within a geographically friendly area from our current assets. Hillcrest is seeking onshore assets where the Company would become the operator or, at the very least, the majority working interest partner. We will advise if and when material developments occur.”
For more information on Hillcrest Resources Ltd, contact Donald Currie toll free at 1-866-609-0006 or visit the Company’s website at www.hillcrestresources.com
On behalf of the Board of Directors
Chairman, Chief Executive Officer and Director
FORWARD LOOKING STATEMENT HERE
Cautionary Statement Regarding “Forward-Looking” Information
Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as “expects”, “intends”, “is expected”, “potential”, “suggests” or variations of such words or phrases, or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company’s control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.
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