Mineral Hill Industries Updates the Oklahoma One Project and Terminates the LOI FOR the Proposed Second Project IN Oklahoma
Tel :604-617-6794
Fax:604-568-9844
Email:[email protected]
Toronto: TSX-V: MHI
Frankfurt: N8Z1/WKN: AODLHP
OTC Market (US): MHIFF
NEWS RELEASE
Vancouver, BC, Canada – June 21, 2019
MINERAL HILL INDUSTRIES UPDATES THE OKLAHOMA ONE PROJECT AND
TERMINATES THE LOI FOR THE PROPOSED SECOND PROJECT IN
OKLAHOMA
Mineral Hill Industries Ltd. (“Mineral Hill” or “Company”), trading on the TSX Venture Exchange under
the trading Symbol “MHI” , on the Deutsche Boerse, Frankfurt under the trading Symbol “N8Z1”, and on
OTC Market (US) under the Symbol “MHIFF”, updated its May 2018 approved NI 51-101 report in respect
to its first Oklahoma project (“OKL-1 Project”) announced on May 25, 2018 (the “OKL-1 Report-1”).
The updated NI-51 101 report updated the OKL-1 Project assets in accordance with the Canadian OIL & Gas
Evaluation (“COGE”) Handbook and the effective date of December 31, 2018 (“OKL-1 Report -2"). The
OKL-1 Report-2 appraised the leaseholds located in Oklahoma’s counties Beaver, Canadian, Creek, Garfield,
Garvin, Kingfisher, Oklahoma, Okmulgee, Woods and Woodward Counties with production data available
through April 2019. The updated appraisal evaluated OKL-1 Project’s Proved Developed Producing (PDP ),
Proved Developed Non-producing (PDNP), Proved Undeveloped (PUD), and Probable Undeveloped (PrUD)
reserves.
In comparison to the OKL-Report-1, the data in the OKL-1 Report-2 exceeded the total of Proved and
Probable present worth from US$ 9,707,410 to US$10,425,620 when discounted by 15% per annum. The
OKL-1 Report -2 used operating expenses and capital costs and escalation of 2% per year in its forecast price
case.
The Reserves estimates contained in the NI-Report have been prepared using a maximum remaining Reserves
life assigned to oil wells of 40 years and the Reserves estimates contained in this report have been prepared
using standard engineering practices generally accepted by the petroleum industry. Decline curve analysis
was used to estimate the remaining Reserves of pressure depletion reserv oirs with enough historical
production data to establish decline trends.
The OKL-1 Report-2 used the following price deck to calculate the present worth of future net revenue ,
based on forecast pricing and before income tax:
FORECAST PRICES
Light and Medium
Oil Prices
Conventional Nat’l
Gas Price
Dates US$/Bbl US$/MMBtu
2018 56.50 3.00
2019 56.50 3.00
2020 63.60 3.00
#170- 422 Richards Street,
Vancouver, BC, Canada, V6B 2Z4
www.MineralHill.com
Tel :604-617-6794
Fax:604-568-9844
Email:[email protected]
2
2021 67.60 3.15
2022 71.60 3.45
2023 73.10 3.60
2024 74.50 3.70
2025 76.00 3.75
2026 77.50 3.85
2027 79.10 3.90
Thereafter 2%/year increase 2%/year increase
The historical hydrocarbon liquid prices were indexed to the mo nthly average of the daily c losing prices
received at the Cushing, Oklaho ma delivery point. The average difference between the wellhead oil price
and the NYMEX price represents adjustments for crude quality, marketing fees, BS&W, transportation costs
and purchaser bonuses. These adjustments were applied to the NYMEX prices listed in table above.
Historical natural gas prices were indexed to the mon thly Henry Hub prices posted in the Inside FERC
publication. Histo rical prices were indexed for each month of available accounting data . The average
difference bet ween the wel lhead p rice and the NYMEX price represents adjus tments for BTU conten t,
marketing, and transportation costs. These adjust ments were applied to the NYMEX price s listed in table
above.
The Company also wishes to announce that it will not proceed with the proposed acquisition of the second
Oklahoma project (“OKL-2) as announced January 14, 2019 since funding for the buyout of OKL-2 project,
as debtor in possession under Chapter 11 of the United States Bankruptcy Code, could not be secured
in spite of the fact that Mineral Hill commissioned and completed a full NI 51-101 Report especially in
respect to the target’s oil and gas assets.
The parties to the OKL-2 Project agreed to a mutual termination in accordance to the LOI.
The Company seeks Safe Harbor
For further information, please contact:
Dieter Peter
President & CEO Phone: (604) 617-6794
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.