Arctic Hunter Announces the Negotiation and Agreement in Principle for Asset Purchase of 2.67% Interest in the Lynch Canyon Heavy Oil Field Situated in Monterey County, California from Genauatica Oil & Gas LLP ____________________________________________________________________________________
ARCTIC HUNTER ENERGY INC.
Suite 1610 - 675 West Hastings Street · Vancouver · British Columbia · V6B 1N2 Telephone: (604) 681-3131
NEWS RELEASE
October 26, 2015 TSX-V Trading Symbol: AHU
______________________________________________________________________________________
ARCTIC HUNTER ANNOUNCES THE NEGOTIATION AND AGREEMENT IN PRINCIPLE FOR ASSET PURCHASE OF 2.67% INTEREST IN THE LYNCH CANYON HEAVY OIL FIELD SITUATED IN MONTEREY COUNTY, CALIFORNIA FROM GENAUATICA OIL & GAS LLP ____________________________________________________________________________________
VANCOUVER, B.C. - Arctic Hunter Energy Inc. (TSX-V: AHU) (“Arctic Hunter” or the “Company”) announces that it has negotiated an agreement in principle for an asset purchase with Genautica Oil & Gas LLP (“Genautica”) pursuant to which the Company will acquire an undivided 2.675 % interest in Genautica’s oil and gas interests situated in the Lynch Canyon area of Monterey County, California (the “Genautica Assets”) for the approximate purchase price of 8.8 million shares of Arctic Hunter at a deemed price of $0.05 cents per share, subject to industry price of heavy oil at time of completion, final due diligence and usual industry adjustments, (the “Arctic Hunter Transaction”) such transaction having an anticipated completion date of December 1, 2015. This transaction is subject to TSX Venture Exchange approval.
The Arctic Hunter proposed heavy oil transaction represents the Company’s initial diversification into the United States, and California oil and gas resource sector by acquiring and securing monthly heavy oil production revenue and, allowing the Company to access advanced oil exploration opportunities. This strategic acquisition of additional revenue producing resource assets, will also, allow the Company to access a wide portfolio of oil exploration opportunities situated in this oil region. The Lynch Canyon Oil project will also help to compliment the Company’s existing heavy oil production in Alberta and Saskatchewan and provides the Company with reputable American working interest partners seasoned in heavy oil production, which will allow the Company access to future expansion opportunities in the oil and natural gas resource sector in this region of California.
ABOUT LYNCH CANYON HEAVY OIL PROJECT SITUATED IN, MONTEREY COUNTY, CALIFORNIA
The Lynch Canyon oil field is situated in the southern Salinas Valley in Monterey County, California near the San Ardo Oil Field. The San Ardo oil field is the 13th largest producing oil field in California. The Lynch Canyon heavy oil & gas production project was redeveloped starting in 2004 by Trio Petroleum, Temblor Petroleum and Rock Creek Oil. The field is being developed using cyclic steaming with a longer term plan for steam flood. Current 2015 daily production ranges from 680-880 bbsl/day. In 2010, the current owners sold 50% of the Lynch Canyon Oil field for $28 USD million dollars to Eagle Petroleum LLC (a subsidiary of Hanwha Trading Company, Korea). The Lynch Canyon project has had an additional $20 USD million invested in the field with infrastructure developments since the completion of the sale in 2010. The current operator, Eagle Petroleum LLC has drilled an additional 8 wells and installed a facilities operation to handle up to 2,000 + BOPD, as oil production and infrastructure expands. The field now has twenty seven (27) operational horizontal wells and five (5) operational vertical wells. Additional drilling and exploration growth activity has been planned for the Lynch Canyon project in 2015-2016 with its working interest partners.
The management of the Company continues to review a number of additional, multiple potential large scale, highly prospective oil & gas production and exploration opportunities, situated in the Salinas Valley region and in outlying areas situated near Bakersfield, California. The targeted assets and opportunities currently under review, include a number of oil production assets with infrastructure facilities, monthly oil & gas production revenue, combined with a team of seasoned oil field personnel and field production operators in place, to oversee production. The production and exploration opportunities being reviewed are situated on trend with a number of large regional California hydrocarbon discoveries which are nearby to existing producing oil fields. The management of the Company continues to review and maintain its high standard of due diligence with regard to the selection of any new management additions, and is being highly selective while considering and assessing its review of the various oil & gas production opportunities while completing its due diligence on the California opportunities and exploration datasets being presented. The Company continues to be cost effective and maintains its low overhead while opportunities are being explored.
ARCTIC HUNTER INCREASES NON-BROKERED PRIVATE PLACEMENT
The Company has increased its previously announced non-brokered private placement and has reserved up to 5,000,000 units (“Units”) in the capital of the Company, to be issued at a subscription price of $0.05 per Unit, for total gross proceeds of up to $250,000. Each Unit will consist of one (1) common share and one (1) common share purchase warrant, each warrant exercisable at a price of $0.10 per share for a period of two (2) years from the date of issuance. The private placement is subject to approval from the TSX Venture Exchange and all of the securities issued pursuant to the private placement will be subject to a four month hold period from the date of issue in accordance with applicable securities laws.
The Company has agreed to pay a finders’ fee to arm’s length parties for services in respect of the Unit Offering. The finder’s fee will consist of a cash fee equal to 8% of the gross proceeds of the Unit Offering.
ABOUT ARCTIC HUNTER ENERGY
The Company is a Canadian Oil & Gas exploration and development Company that identifies, and finances the acquisition, exploration and development of oil and gas assets primarily situated in Western Canada. The Company is a junior heavy oil producer in the greater Lloydminster area of Alberta & Saskatchewan. The Company is constantly reviewing future production and exploration opportunities and selective property acquisitions and identifying low risk exploration drilling opportunities situated in Canada, the United States and abroad.
The Company has qualified management and has an Oil & Gas team of professionals seasoned in production, field exploration and drilling. The Company has the resources and necessary manpower to develop its natural resource and production properties. The Company is committed to minimizing risk through the selective acquisition, exploration and development of petroleum and natural gas resource assets. The Company intends to increase its oil production and reserves through its exploration activities and strategic property acquisitions.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Tim Coupland, President and CEO Arctic Hunter Energy Inc.
Tel: (604) 681-3131 [email protected]
or
Ted Burylo, Director Arctic Hunter Energy Inc.
Tel: (604) 764-9178
Neither the TSX Venture Exchange nor its Regulation Services Provider, (as the term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.