Welcome!

News Feed Item

Canamax Announces Operations Update and New Credit Facilities

CALGARY, ALBERTA -- (Marketwired) -- 07/25/14 --

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Canamax Energy Ltd. ("Canamax" or the "Company") (TSX VENTURE:CAC) is pleased to announce an operations update including current production rates, the results of recently completed capital expenditure and well optimization activities, and the establishment of new credit facilities.

Current Production Rates

The current net production rate of Canamax is approximately 1,200 boe/d (61% oil and NGL and 39% natural gas) broken down by core area as follows:

---------------------
Area        Net boe/d
---------------------
Flood             350
---------------------
Brazeau           340
---------------------
Retlaw            300
---------------------
Wapiti             80
---------------------
Non-Core          130
---------------------
Total           1,200
---------------------

Notes:

(i)Canamax's core areas were re-aligned after the acquisition of Ki Exploration Inc. ("Ki") on April 30, 2014.

(ii) Flood production includes initial production from two Montney oil wells drilled and completed in June/July and put on production on July 18. The targeted, stabilized production from all of the currently producing Flood wells is anticipated to be approximately 300 boe/d.

Given the better than expected results from recent work at Flood and Retlaw, combined with the remaining expenditures planned under the 2014 capital budget, Canamax is raising its targeted December 31, 2014 production exit rate to be in the range of 1,500 - 1,600 boe/d - an increase from the original target of 1,400 - 1,500 boe/d. "We have exceeded expectations in the optimization and development of our Flood and Retlaw properties" commented CEO Brad Gabel. "We continue to focus on building out our core areas through property and corporate acquisitions at attractive financial metrics with the objective of building high working interest, contiguous land positions with significant development potential".

Capital Expenditure and Well Optimization Activities

Below is a summary of the recent work completed at each of the Company's core properties.

Flood

Canamax has been very active in the Flood area, completing the following:

--  Acquired 100% of the working interests in five sections of land adjacent
    to the northwest portion of Canamax's existing Flood acreage (through
    two separate transactions), for aggregate consideration of $1.1 million.
    Prior to acquisition of these working interests, this property had gross
    Montney oil production of approximately 50 bbl/d from five producing
    wells. Due to the high associated water cuts, only marginal cash flow
    was being realized from this production. However, Canamax will be able
    to significantly reduce operating costs from these wells once they are
    tied into the Company's water handling/disposal facilities in the area
    (prior to December 31). 

--  Drilled and completed two successful Montney oil wells on the north end
    of the Flood property which were both put on production on July 18. 

--  Activated the water handling/disposal facilities on the southwest
    portion of the Flood property and placed four shut-in wells on
    production that were waiting for these facilities to start up.

--  Bought out a gross overriding royalty over a significant portion of the
    Flood property for $0.6 million. This buyout will result in improved
    netbacks from the overall Flood production going forward.

After these transactions, the land holdings at Flood have increased from 37 to 42 contiguous sections (approximately 27,000 acres) - all owned 100% by Canamax. Current aggregate production from the area is approximately 350 bbl/d of Montney oil, which includes initial production rates from the two new wells drilled in June/July. The Company is targeting a stabilized, aggregate production rate from Flood in the short term of 300 bbl/d from the existing, producing wells.

As part of the 2014 capital expenditure plan, Canamax is scheduled to drill an additional 6 vertical wells in the north end of the property commencing in November and re-complete three of the newly acquired wells prior to December 31. In addition, pipeline infrastructure is planned to be put in place in November and December to tie in the new drills plus all of the existing wells on the north and northwest portions of the property, to the water handling/disposal facilities. These tie-ins should significantly reduce overall operating costs and improve netbacks. As part of the infrastructure expansion, Canamax plans to tie in the produced solution gas from the Flood wells which will provide additional revenue and gains in oil production.

Brazeau

At Brazeau, Canamax has two 100% owned sections with current production of approximately 340 boe/d (30% oil and NGL and 70% natural gas). An existing vertical well was recently re-completed targeting Wilrich natural gas. Although the well tested positively for gas, the zone was found to be tight. As such, this zone may only be exploitable through horizontal, multi-frac technology. There are no additional capital expenditure plans for this area prior to December 31.

All Brazeau production was shut-in for an approximate three week period during late June and early July as the Keyera gas plant in the area was down for a plant turnaround. Full production resumed in the area on July 12.

Retlaw

Retlaw was one of the core areas of Ki with net production of approximately 170 boe/d on the April 30, 2014 acquisition date. Since the acquisition, Canamax has increased net production in the area to approximately 300 boe/d (55% oil and NGL and 45% natural gas) through four well re-completions and the optimization of a number of other wells.

Canamax has identified additional, low cost re-completion and optimization opportunities which are expected to increase total net production from Retlaw to approximately 400 boe/d prior to December 31.

Wapiti

As previously announced, the Wapiti horizontal, Cardium farm-in well (which came on production in late March) had been flowing at a gross production rate of approximately 143 boe/d (net 100 boe/d) in June. At the end of June, a pump was installed on this well and production has been stabilized at a net current rate of 80 boe/d (83% oil and NGL and 17% natural gas).

The Wapiti play consists of a total of 2.25 sections (1.6 net) of land in which Canamax has a 70% working interest. As part of the previously announced capital expenditure budget, Canamax is planning to drill another horizontal well (net 0.7) in the fourth calendar quarter of 2014 and is targeting similar production rates as the initial well. Based on management's analysis of the play, there are a total of six (net 4.2) additional development locations in the Wapiti area.

Non-Core Properties

During May, Canamax announced that the Company had a conditional sale of its Delta West property for $2.4 million. This property, which was acquired as part of the Ki acquisition, was producing approximately 50 bbl/d of light oil and generating annual cash flow of approximately $0.8 million. This sale was not completed as the purchaser did not meet certain conditions prior to the scheduled closing date. However, there are other interested parties looking at this non-core property. If this property is not sold, it will still continue to provide positive cash flow at low decline rates for Canamax.

New Credit Facilities

Canamax has recently established a $6 million revolving credit facility with the National Bank of Canada. This facility will give the Company the financial flexibility to continue to pursue strategic acquisitions and finance a portion of the capital expenditure program. The previously announced $14 million capital program (for the period from May through December 2014) is being funded primarily through a portion of the net proceeds received from the $13 million financing completed in April and May, and operating cash flow.

Canamax Added to TSX Venture Select list

Effective July 21, 2014, Canamax was added to the S&P/TSX Venture Select Index, which will provide the Company with increased exposure in the capital markets. This index was designed to measure the performance of those S&P/TSX Venture Composite Index constituents that meet specific market capitalization and liquidity criteria.

About Canamax

Canamax is a junior oil and gas company in the business of consolidating micro-cap oil and gas companies and exploiting low risk development opportunities in the Western Canadian Sedimentary Basin.

Neither the 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.

Reader Advisories

The Company anticipates remaining disciplined but flexible in respect of its planned capital expenditures as it monitors drilling and completion results, business conditions, prospective acquisitions and commodity prices throughout calendar 2014. Where deemed prudent, the Company may make adjustments to its planned capital expenditures. Actual spending may vary due to a variety of factors, including drilling and completion results, crude oil and natural gas prices, economic conditions, prevailing debt and/or equity markets, field services and equipment availability, permitting and any future acquisitions. The timing of most capital expenditures is discretionary. Consequently, the Company has a significant degree of flexibility to adjust the level of its capital expenditures as circumstances warrant. Additionally, to enhance flexibility of its capital program, the Company typically does not enter into material long-term obligations with any of its drilling contractors or service providers with respect to its operated crude oil and natural gas properties.

Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", "seeks", "potential", "plans", "estimates", "targets" and similar expressions. Specific forward-looking statements included in this press release include comments related to the Company's planned capital expenditures, well recompletions; expected production rates resulting from, and anticipated hydrocarbon composition produced as a result of, planned capital expenditures; forecasted average daily production during the 2014 calendar year; projected exit rates of production for calendar 2014; the nature, timing and amounts of planned capital expenditures; production from the properties described herein; infrastructure and tie-ins for the Company's production; drilling locations on the Company's properties; recompletion opportunities on the Company's properties; reduction of operating costs and improved netbacks resulting from planned capital expenditures; sources of funding for planned capital expenditures; cash flow from operations for the Company; and the completion of acquisitions and dispositions discussed herein.

Forward-looking statements necessarily involve known and unknown risks and uncertainties, including, without limitation, the impact of general economic conditions, the risks and liabilities inherent in oil and natural gas operations; marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions or dispositions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters, including changes in how they are interpreted and enforced; changes in incentive programs related to the oil and natural gas industry generally; and geological, technical, drilling and processing problems and other difficulties in producing petroleum and natural gas reserves; and obtaining required approvals of regulatory authorities. Readers are cautioned that the foregoing list of factors is not exhaustive.

Readers are cautioned not to place undue reliance on forward-looking statements. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits the Company will derive from them. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

The forward looking statements contained in this news release are made as of the date of this news release, and Canamax does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

Conversion

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 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. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Contacts:
Canamax Energy Ltd.
Brad Gabel
President & CEO
(587) 349-5186

Canamax Energy Ltd.
Chris Martin
Vice President, Finance & CFO
(587) 349-5186

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that CAST Software will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CAST was founded more than 25 years ago to make the invisible visible. Built around the idea that even the best analytics on the market still leave blind spots for technical teams looking to deliver better software and prevent outages, CAST provides the software intelligence that matter ...
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, discussed how AI can simplify cloud operations. He covered the following topics: why cloud mana...
Docker containers have brought great opportunities to shorten the deployment process through continuous integration and the delivery of applications and microservices. This applies equally to enterprise data centers as well as the cloud. In his session at 20th Cloud Expo, Jari Kolehmainen, founder and CTO of Kontena, discussed solutions and benefits of a deeply integrated deployment pipeline using technologies such as container management platforms, Docker containers, and the drone.io Cl tool. H...
From 2013, NTT Communications has been providing cPaaS service, SkyWay. Its customer’s expectations for leveraging WebRTC technology are not only typical real-time communication use cases such as Web conference, remote education, but also IoT use cases such as remote camera monitoring, smart-glass, and robotic. Because of this, NTT Communications has numerous IoT business use-cases that its customers are developing on top of PaaS. WebRTC will lead IoT businesses to be more innovative and address...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, will discuss th...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single-threaded, you can effectively identify hot spots in your serverless code. In his session at @DevOpsSummit at 21st Cloud Expo, Dave Martin, Product owner at CA Technologies, will give a live demonstration and code walkthrough, showing how ...
Translating agile methodology into real-world best practices within the modern software factory has driven widespread DevOps adoption, yet much work remains to expand workflows and tooling across the enterprise. As models evolve from pockets of experimentation into wholescale organizational reinvention, practitioners find themselves challenged to incorporate the culture and architecture necessary to support DevOps at scale.
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
As more and more companies are making the shift from on-premises to public cloud, the standard approach to DevOps is evolving. From encryption, compliance and regulations like GDPR, security in the cloud has become a hot topic. Many DevOps-focused companies have hired dedicated staff to fulfill these requirements, often creating further siloes, complexity and cost. This session aims to highlight existing DevOps cultural approaches, tooling and how security can be wrapped in every facet of the bu...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
yperConvergence came to market with the objective of being simple, flexible and to help drive down operating expenses. It reduced the footprint by bundling the compute/storage/network into one box. This brought a new set of challenges as the HyperConverged vendors are very focused on their own proprietary building blocks. If you want to scale in a certain way, let’s say you identified a need for more storage and want to add a device that is not sold by the HyperConverged vendor, forget about it....
SYS-CON Events announced today that Pulzze Systems will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems Inc, provides the software product "The Interactor" that uniquely simplifies building IoT, Web and Smart Enterprise Solutions. It is a Silicon Valley startup funded by US government agencies, NSF and DHS to bring innovative solutions to market.
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
With Cloud Foundry you can easily deploy and use apps utilizing websocket technology, but not everybody realizes that scaling them out is not that trivial. In his session at 21st Cloud Expo, Roman Swoszowski, CTO and VP, Cloud Foundry Services, at Grape Up, will show you an example of how to deal with this issue. He will demonstrate a cloud-native Spring Boot app running in Cloud Foundry and communicating with clients over websocket protocol that can be easily scaled horizontally and coordinate...