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Georox Acquires Producing Oil And Gas Interests In Red Earth/Otter, Alberta And Completes Non-Brokered Private Placement

Published on 13 May 2014

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by Press Office

(IRW-PRESS and WireNews)

Vienna, Austria

Georox Resources Inc. ("Georox" or the "Corporation") (GXR:TSX-V; OF6A:FRA) has completed the previously announced (April 21, 2014 press release) acquisition of certain high working interest producing oil and gas interests in Red Earth, Alberta, approximately 106 kmsnorth of Lesser Slave Lake (320 kms north west of Edmonton) from an arm'slength corporation(the "Red Earth/Otter Acquisition" or the "Transaction") and has also completed its previously announced a nonbrokered private placement.

Red Earth/Otter Acquisition

The properties subject to the Transaction consist of working interests in a total of 11.38 sections of land comprised of 2.125 sections in Red Earth that has nine producing oil wells and one standing oil well inwhich Georox acquired a 100% working interest subject to reduction, in most instances, to a 97% working interest after payout.  In addition, Georox acquired the well bores to three abandoned wells in which it will hold a 100% working interest in one and a 50% working interest in the two others.  In Otter, located 25 kms to the NW of Red Earth, Georox acquired a 100% working interests in 9.25 sections of prospective land.

Georox will become the operator for all wells except two of the abandoned wells.

Georox believes that there is an opportunity to drill two additional wells at Red Earth and potential beyond primary recovery through the implementation of water flood/pressure support to significantly extend the life and recoverable reserves from the Red Earth properties.  Georox is currently reviewing and assessing the Red Earth properties in detail to identify opportunities to enhance production before initiating new operations.

The purchase price for the Transaction was approximately $6,100,000 with an effective date of April 1, 2014.  The acquisition metrics work out to a purchase price of $39,900 per boepd (Proved + Probable) and $20.38 per boe's (Proved + Probable) for this light oil property. Reserve life index is 16.8 years for Proved Developed Producing reserves and 24.8 years for Proved + Probable reserves.

Sproule, independent reservoir engineers, prepared a report in April 2014 (the "Sproule Report") in support of Georox's acquisition of the P&NG reserves of a third party.  A Reserves Summary of the Sproule Report to Georox as at March 31, 2014 is as follows:


(1)The values listed herein do not necessarily represent the fair market value.

(2)Numbers may not reflect exact numbers in the SprouleReport tables due to rounding.

(3)The price forecasts used in the evaluation were based on Sproule's March 31st, 2014 pricing model.

In connection with the Transaction, Georox utilized $3,415,000 of debt from its current borrowing facility, as amended, and a short term mezzanine debt facility of $2.2 million which will be due on April 30, 2015.

Non-Brokered Private Placement

The Corporation completed a private placement (the "Private Placement") of 8,450,923 units of the Corporation ("Units") at a price of $0.065 per Unit for aggregate gross proceeds of $5.


  • Joachim Brunner
  • IRW-Press
  • PR Contact
  • Tel: +43724221193011
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Posted 2014-05-13 13:26:00