IN CONTRAST TO ERHC's EFFORTS IN TEXAS, HERE IS A COMPANY DOING IT RIGHT:
Molori Energy Inc. Provides Operational Update and Year-End Results
Accesswire AccesswireFebruary 28, 2017Comment
VANCOUVER, BC / ACCESSWIRE / February 28, 2017 / Molori Energy Inc. (MOL.V) (MOLOF) ("Molori" or the "Company") is pleased to report the release of its annual consolidated financial statements and the notes the year ended October 31, 2016, together with the auditors' report thereon (the "2016 Financial Statements") and the related management's discussion and analysis for the year ended October 31, 2016 (the "2016 MD&A"). The 2016 Financial Statements and 2016 MD&A are available on the Company's website at www.molorienergy.com and under Molori's SEDAR profile at www.sedar.com.
Annual Highlights
On June 6, 2016, Molori closed on the purchase of a 25% working interest in the oil and gas production from certain leases owned by Texas-based Ponderosa Energy, LLC. ("Ponderosa"). In conjunction with the purchase, Molori committed USD $1,000,000 in working capital towards a program to complete workovers on the Texas-based leases in order to increase production. Ponderosa, a domestic USA oil and gas production company, is the operator on the leases and is presently focused on aggregating and developing shallow conventional oil reserves in Texas. Ponderosa purchased these leases when oil prices dipped below $30 per barrel from distressed operators with highly-leveraged balance sheets and an inability to fund operations. Molori and Ponderosa have chosen to collectively pursue assets which specifically exhibit the following properties: shallow reservoir, low geologic risk, moderate decline rates, and existing infrastructure.
From June to October 2016, Ponderosa spent approximately US$420,000 on reworking and returning to production over 30 wells on the leases it shares with Molori. That saw the average barrels of oil equivalent per day ("BOEPD")* of 49 in June, increase to an average of 126 BOEPD for the 5 month-period.
Ponderosa produced a total of 5,546 barrels of oil ("bbl") and 82,201 Mcf in gas during the 5 month period, June to October. Combined, that translates into 19,246 BOEPD for the 5 month period and US$640,000 in gross revenue.
Lease operating expenses amounted to US$13.15 barrels of oil equivalent ("BOE"), for the 5 month period, June to October 2016.
Molori recorded a gain of $3,773,283 on the write down of its Subsidiary, Lion Petroleum. As a result, total income for the year was $2,293,821 as compared to a loss of $13,650,583 in the prior year.
In addition to purchasing the 25% working interest in Ponderosa, the Company reduced its current liabilities by $1,656,500.
Outlook
The Company will continue to strengthen its balance sheet in the 2017 fiscal year.
In partnership with Ponderosa, and in order to grow production, Molori is actively pursuing opportunities to acquire additional leases in the Panhandle area.
The Company is awaiting completion in the next few weeks of a revised NI 51-101 reserve report, which it anticipates will reflect an increase in reserves as a result of the additional wells being brought on line.
Ponderosa's anticipates being at 500+ BOEPD in next several weeks. February average production was approximately 400 BOEPD resulting in over 11,000 barrels of oil being produced for the month.
Joel Dumaresq, CEO of Molori stated: "We are extremely pleased with the efforts of our operating partner — Ponderosa Energy - and in particular with the growth in production. We feel that the results of the past 6 months, validate our strategy of acquiring non-operating wells and bringing them into production in a cost-efficient manner. We are actively considering our options for increasing our ownership of these assets."
