PROPERTY DISPOSITION / Danoil Announces Sale of Non-core Properties
and Increase in Natural Gas Production
TSE, ASE SYMBOL: DAN
JANUARY 5, 1999
CALGARY, ALBERTA--Danoil Energy Ltd. (Danoil) announces that it
has agreed to sell properties for total consideration of $6.4
million. The consideration consisted of $5.45 million in cash,
$614,000 in a promissory note and $300,000 in common shares. A
total of $4.1 million in sales closed prior to December 31, 1998.
All proceeds will be utilized to reduce bank indebtedness.
Included in the sale was Danoil's interest at the Carson Creek gas
plant, 3,840 acres of undeveloped land, a shut-in gas well,
several minor natural gas producing properties and a heavy oil
property. Total production from the properties sold was 750 mcf/d
and 141 bopd or 216 barrels of oil equivalent per day. Danoil
intends to continue to sell additional non-core properties for an
approximate $2.0 million.
Danoil was able to achieve its year end target of 14 million cubic
feet per day of natural gas production. After giving effect to the
dispositions, oil volumes are 2,160 bopd with 400 bopd of heavy
oil remaining shut in and 13.25 million cubic feet per day of
natural gas resulting in total current production of 3,485 barrels
of oil equivalent per day.
In 1998, activity at Judy Creek resulted in four productive wells
adding an estimated 3.8 mmcf/d (net 1.56 mmcf/d). This week Danoil
will commence the first of four new wells (100 percent working
interest) to be drilled at Judy Creek. This area continues to be
the prime area of interest as Danoil pursues its goal of balancing
its gas/oil production ratio. In 1997 Danoil averaged 5.8 mmcf/d
as compared to 9.5 mmcf/d in 1998. Currently the Company
production mix is approximately 38 percent natural gas (13.25
mmcf/d), 22 percent light oil, 18 percent medium oil and 22
percent heavy oil. |
