Storm Resources Ltd. Announces Asset Disposition and Operations Update

STORM RESOURCES LTD. ("Storm") (TSX VENTURE:SRX) has entered into a purchase and
sale agreement in relation to the disposition of 150 Boe per day in the Mica
area of northeast British Columbia. Details of the disposition are provided
below. 




--  Disposition price is $13.5 million for Storm's 100% working interest in
    the property. 
--  Closing date is October 18, 2012 with an effective date of September 1,
    2012. 
--  In the first half of 2012, production averaged 148 Boe per day (64%
    light oil plus natural gas liquids) and the field netback was $42.70 per
    Boe.  
--  The asset contains an estimated 630 Mboe total proved and 722 MBoe of
    proved plus probable reserves (68% light oil plus natural gas liquids)
    based on an independent reserve report dated December 31, 2011 prepared
    by InSite Petroleum Consultants Ltd. in accordance with National
    Instrument 51-101. There was no future development capital assigned to
    the property. 



In mid-August, Storm sold 1.5 million shares of Chinook Energy Inc. for net
proceeds totaling $2.2 million. This results in Storm's public company
investments currently totaling 3.0 million shares of Chinook Energy Inc. plus
1.05 million shares of Bridge Energy ASA with an estimated value of $6.9 million
based on closing share prices on September 6, 2012.


With the disposition of Mica, Storm's bank credit facility will be reduced from
$70 million to $62 million. The disposition of Mica ($13.5 million), sale of
Chinook Energy Inc. shares ($2.2 million) and the previously disclosed
disposition of the Red Earth property on July 24, 2012 ($2.4 million) will
result in an $18.1 million reduction to net debt which was $53.7 million at the
end of the second quarter. Net debt includes the working capital deficiency but
does not including the value of Storm's public company investments. Including
the value of Storm's public company investments, net debt exiting 2012 is
forecast to be approximately $37 million. This is based on guidance previously
provided in the release of second quarter results on August 13, 2012 and after
accounting for the disposition of the Mica property effective September 1, 2012.


On August 22, 2012, the fourth Montney horizontal well (0.6 net) at Umbach began
producing with the average rate to date being 3.9 Mmcf per day gross raw gas or
450 Boe per day net sales to Storm (25% natural gas liquids). A fifth Montney
horizontal well (0.6 net) which included a vertical pilot hole was cased in
August and will be completed and tied in by early October. Log response over the
Montney in the vertical pilot hole was similar to pre-existing well control
(approximately 25 meters net pay in the upper plus 20 metres net pay in middle).
The drilling rig is currently being moved to drill the sixth Montney horizontal
well (0.6 net). 


Excluding the Mica property, production is currently approximately 2,600 Boe per
day and is expected to average approximately 2,400 Boe per day in the third
quarter. Fourth quarter production is now forecast to average 2,500 to 2,600 Boe
per day (40% oil plus natural gas liquids) which assumes 500 Boe per day at
Grande Prairie continues to be shut-in due to low natural gas prices.


The disposition of Mica and sale of Chinook Energy Inc. shares reflects Storm's
commitment to maintaining debt levels at a reasonable multiple of cash flow in
order to preserve financial flexibility to pursue growth opportunities or to
accelerate capital investment on development activities at existing properties
if results are supportive of doing so.


Storm Resources Ltd. began operations in August 2010. Storm is headquartered in
Calgary, Alberta and is active in the Horn River Basin and Umbach areas of
northeast British Columbia, and at Grande Prairie in northwest Alberta. 


READER ADVISORIES

Boe Presentation - For the purpose of calculating unit revenues and costs,
natural gas is converted to a barrel of oil equivalent ("Boe") using six
thousand cubic feet ("Mcf") of natural gas equal to one barrel of oil unless
otherwise stated. Boe may be misleading, particularly if used in isolation. A
Boe conversion ratio of six Mcf to one barrel ("Bbl") is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. All Boe measurements and
conversions in this report are derived by converting natural gas to oil in the
ratio of six thousand cubic feet of gas to one barrel of oil. Mboe means 1,000
Boe.


This press release contains forward-looking statements and forward-looking
information within the meaning of applicable securities laws. The use of any of
the words "expect", "anticipate", "continue", "estimate", "objective",
"ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and
similar expressions are intended to identify forward-looking information or
statements. More particularly and without limitation, this press release
contains forward-looking statements and information concerning the combined
company's working capital and bank facility, reserves, undeveloped land holdings
and anticipated benefits from the disposition. The forward-looking statements
and information are based on certain key expectations and assumptions made by
Storm, including expectations and assumptions concerning prevailing commodity
prices and exchange rates, applicable royalty rates and tax laws; future well
production rates and reserve volumes; the timing of receipt of regulatory and
shareholder approvals, the performance of existing wells; the success obtained
in drilling new wells; and the sufficiency of budgeted capital expenditures in
carrying out planned activities; and the availability and cost of labour and
services. Although Storm believes that the expectations and assumptions on which
such forward-looking statements and information are based are reasonable, undue
reliance should not be placed on the forward-looking statements and information
because Storm can give no assurance that they will prove to be correct. Since
forward-looking statements and information address future events and conditions,
by their very nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated due to a number
of factors and risks.


These include, but are not limited to, the risks associated with the oil and gas
industry in general such as operational risks in development, exploration and
production; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections relating to reserves,
production, costs and expenses; health, safety and environmental risks;
commodity price and exchange rate fluctuations; marketing and transportation;
loss of markets; environmental risks; competition; incorrect assessment of the
value of acquisitions and dispositions; failure to realize the anticipated
benefits of acquisitions and dispositions; ability to access sufficient capital
from internal and external sources; failure to obtain required regulatory and
other approvals; and changes in legislation, including but not limited to tax
laws, royalties and environmental regulations. There are risks also inherent in
the nature of the proposed disposition, including failure to realize anticipated
production or reserve increases and decreases; and incorrect assessments of
values or future capital and operating costs.


This press release also contains forward-looking statements and information
concerning the anticipated timing for completion of, and the effective date of
the disposition. Storm has provided these anticipated dates in reliance on
certain assumptions believed to be reasonable at this time. Accordingly, readers
should not place undue reliance on the forward-looking statements and
information contained in this press release concerning these dates. Readers are
cautioned that the foregoing list of factors is not exhaustive. Additional
information on these and other factors that could affect Storm's financial
results are included in reports on file with applicable securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com), and
at Storm's website (www.stormresourcesltd.com). The forward-looking statements
and information contained in this press release are made as of the date hereof
and Storm undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
Storm Resources Ltd. (TSXV:SRX)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024