2014 Annual Report
Brisbane, Mar 31, 2015 AEST (ABN Newswire) - Over the past year Pryme Energy Limited (
ASX:PYM) has been recapitalised and has commenced the exploration and development of its Capitola Oil Project along the highly prospective and very active eastern shelf of the Permian Basin in Texas.
The company enters 2015 with a strong balance sheet, including A$8.4 million in cash, an increasing cash flow from operations and a significant interest in a project with very strong conventional oil production potential as well as upside through exploitation of the Cline Shale formation.
In 2014 management announced the agreement to acquire an interest in the Capitola Oil Project which comprises 9,333 acres in two acreage blocks along the eastern shelf of the Permian Basin in Texas. By the end of the year three wells had been drilled and two of these completed by perforating and stimulating production from prospective hydrocarbon bearing zones. The first of these wells reached its target production level early in 2015 and the second and third wells are in the process of "cleaning up." Notwithstanding the dramatic fall in the price of oil through the second half of 2014, the Capitola wells are now cash flow positive with cash operating costs in the range from US$10 - $12 per barrel.
In 2015 the decision was taken to drill two additional wells in the Capitola Oil Project, and to cap the company's overall working interest in the project at 45% of the shallow rights and 30% of the deep (Cline Shale and below) mineral rights. There are over 200 vertical and over 60 horizontal well locations within the Capitola Oil Project acreage and the company has the right to nominate wells to be drilled and participate in them at a working interest of at least 45% and up to 100% depending on the participation election of its project coventurers.
The early indications of performance suggests that Capitola will be a very good project for Pryme. Recapitalisation of the company was achieved in three stages. The first two stages comprised rights issues in the first seven months of the year and the placement of the rights issue shortfalls to sophisticated investors. Reflecting the difficult time for capital raisings by junior resources sector companies, the rights issues were made at significant discounts to the share price at the time. However, all shareholders were given the opportunity to invest and the A$6.3 million raised (before costs) enabled the company to fund entry to the Capitola Oil Project.
The third stage of the recapitalisation was the sale of the company's interest in the Raven project for a profit of A$6.2 million. Proceeds from the Raven sale have placed the company in a strong position to maintain and expand operations while oil prices are at current levels or lower.
It also enables the company to diversify its oil exploration and development activities within the United States should suitable value-adding opportunities arise.
To view the annual report, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-PYM-850793.pdf
About Indago Energy Ltd
Indago Energy Ltd (ASX:INK) (OTCMKTS:POGLY) is an Australian listed company engaged in oil and gas exploration, development and production. Indago's project portfolio includes liquid rich producing assets together with substantial oil development and exploration acreage in the United States.
The Company's Exploration and Production focus is on high growth oil and gas projects offering scalability of production, cash flows and reserves. Indago currently has several producing projects together with a significant acreage position. The Company's immediate focus is the development of its Capitola Oil Project located in an active region of the Cline Shale resource play along the Eastern Shelf of the Permian Basin, Texas. The project's core development and exploitation opportunities are shallower multiple "stacked" sandstones and limestones to depths of 7,000 feet which are effectively produced from vertically drilled wells. Indago's value driven model is executed through exploiting shallower, well defined intervals with advanced completion and stimulation technology within known produced oil fields together with exposure to the emerging Cline Shale resource play.
Indago's shares are publicly traded on the Australian Securities Exchange (ASX ticker: INK) and also as American Depositary Receipts on the OTCQX (ADR ticker: POGLY).
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