ANNOUNCES ENTRY INTO ANADARKO BASIN STACK PLAY
Jericho Oil Corp. (JCO.V) has entered into an agreement to acquire an interest in 9,400 net surface acres in the oil window of the Anadarko basin STACK (Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties)) play in Oklahoma. This transaction provides Jericho the option to invest up to $9-million (U.S.) in acquisition and development capital to acquire just under one-third of the joint venture that will own the assets. The transaction is subject to customary closing conditions and is expected to close in third quarter 2017.
The 9,400 net surface acres (approximately 85 per cent operated) being acquired in the STACK play are a highly contiguous block located in Blaine county, Oklahoma. Situated in the normally pressured oil window of the play, these properties include development targets in up to six intervals, including multiple landing zones in the Chester, Meramec, Osage and Woodford formations. The acreage is currently 100 per cent held by production from legacy producing wellbores.
Joint venture acquisition highlights:
- 8,600 net Mississippian acres in the normally pressured oil window of the play;
- Significant high-quality resource potential with unrisked inventory of more than 160 locations;
- Implied acreage value of $2,300 (U.S.) per net Mississippian acre adjusting for proved developed producing (PDP) reserves;
- Acreage position surrounded by substantial drilling and pooling activity targeting the Meramec and Osage formations from Chesapeake, Sandridge, Alta Mesa, Gastar as well as multiple private-equity-backed operators;
- Aligns with strategy to generate attractive returns at under $50 per barrel.
"This attractive entry in the Anadarko basin STACK play has captured a contiguous, operated position in the most economic portion of the STACK oil window, which has emerged as one of the top resources plays in North America," said Ryan Breen, director of corporate development. "Combined with our legacy assets assembled throughout the oil price downturn, Jericho has elevated its portfolio providing significant resource and drilling inventory to potentially support growth for years to come."
Leadership and technical team growth
Jericho's board of directors has appointed Brian Williamson as chief executive officer. Mr. Williamson is currently the president of Jericho Oil (Oklahoma) Corp. and oversees operations for Jericho's Oklahoma asset base. Mr. Williamson began his career at Arthur Andersen as part of its tax and business advisory services practice. Since then, he has held senior management positions at The Harbor Group, a private-equity-backed energy investment, trading and risk management firm, and managed the private equity platform for a New York-based financial institution. Mr. Williamson has been president of Jericho's Oklahoma operations since 2016.
Jericho has also added Jennifer McQueen as vice-president of engineering and Ron Haverman as senior geologist. Both appointments bolster the technical expertise and experience of Jericho's engineering and geology team as Jericho commences exploration and development of its newly acquired STACK play acreage.
Prior to joining Jericho, Ms. McQueen and Mr. Haverman held various positions of increasing responsibility within large independent companies focusing on horizontal development in shale oil plays across the United States, including Samson Resources, SM Energy and Ceja Corp., in addition to multiple private-equity-backed ventures. Detailed bios for Ms. McQueen and Mr. Haverman are posted on Jericho's website.
"I am thrilled to hand over the reins to Brian as Jericho enters a new phase focused on its high-quality STACK play in addition to its legacy Oklahoma footprint built throughout the downturn," said Allen Wilson, Jericho's founding CEO. "As part of the transition, we are expanding the depth of our technical team in anticipation of the development of our assets and future growth. I look forward to continuing my work alongside our team."
Jericho has closed the second tranche of its $5.66-million private placement, which was announced Aug. 2, 2017. The second tranche raised proceeds of $943,396 and resulted in the issuance of 2,096,436 units at a price of 45 cents per unit. Each unit comprised one share and one-half warrant, with each whole warrant exercisable into one additional common share at 60 cents per share for a period of 36 months from closing. All securities issued on closing of the second tranche are subject to a four-month hold period from the date of closing.
About Jericho Oil Corp.
Jericho is a growth-oriented oil and gas company engaged in the acquisition, exploration, development and production of overlooked and undervalued oil properties in the Mid-Continent.