May 23, 2018, Vancouver, Canada – Renaissance Oil Corp. (“Renaissance” or the “Company”) (TSX-V:ROE)(OTCQB: RNSFF) reports its first quarter 2018 results. All dollar figures are Canadian dollars, unless otherwise noted.
FIRST QUARTER 2018 HIGHLIGHTS
- Renaissance, in conjunction with its partner, LUKOIL, drilled six new wells targeting the shallow Chicontepec formations and completed workovers and repair operations on the final well of a six well restoration program;
- The Company successfully negotiated land use agreements, with local land owners, at the three Chiapas properties, Mundo Nuevo, Topén and Malva, providing ongoing surface access for Renaissance to further its work programs;
- Production was temporarily suspended during the discussions with local land owners resulting in reduced production for the period which has subsequently been restored to an average of 1,663 boe/d for April 2018;
- The recent improvement in oil and gas prices continued into the first quarter as sales of crude oil averaged $72.98/Bbl compared to $66.65/Bbl in the previous quarter, while sales of natural gas averaged $4.92/Mcf compared with $4.42/Mcf in the first quarter of 2017; and
- The Company closed on gross proceeds of $11.1 million via the issuance of common shares and associated share purchase warrants.
|Three Months Ended|
|Mar 31, 2018||Dec 31, 2017||Sep 30, 2017|
|Crude oil (Bbl/d)||434||654||616|
|Natural gas (Mcf/d)||4,892||6,081||6,098|
|Crude oil ($/Bbl)||72.98||66.65||57.08|
|Natural gas ($/Mcf)||4.92||4.42||4.31|
|Per share, basic & diluted||-0.01||-0.01||0|
|Funds flow from operations1||-188,934||-2,122,502||177,418|
|Per share, basic & diluted1||-0.01||-0.01||0|
The first quarter of 2018 was the most active period to date for Renaissance for oil field development where the Company, and its partner LUKOIL, operated its first continuous drilling program at the Amatitlán block in Veracruz, Mexico. During the quarter, six wells were drilled intersecting the shallow Tertiary aged Chicontepec formations. To date, ten Chicontepec wells, of an expanded fourteen well program, have been drilled with the drilling of an eleventh well now underway. Six of the new wells have undergone completion operations and were placed onto production, with a further four completions expected to be concluded in the coming weeks. The operations team has incorporated new drilling and completion techniques to Mexico, thereby reducing costs and time to bring new wells on production. Renaissance has also completed workovers and repair operations on all six wells of the scheduled workover program.
During Q1 2018, in the state of Chiapas, Renaissance successfully negotiated land use agreements with local landowners at the Mundo Nuevo, Topén and Malva blocks (the “Chiapas Blocks”). The new agreements provide ongoing surface access for Renaissance to further its work programs under the approved initial development plans in exchange for monthly consideration. Production was temporarily suspended at the Malva and Topén blocks during the discussions with the landowners, resulting in a reduced production schedule. During Q1, 2018, the Company produced 1,249 boe/d in the Chiapas Blocks. Production levels have now been restored to an average level of 1,663 boe/d for April 2018, consistent with Q4 2017.
The Company expects to receive the final approvals for the required permitting in the near term allowing for the drilling of new wells and workovers for the Chiapas Blocks in 2018. This lower risk drilling program of three new wells and a series of workovers to existing wells, holds the potential to substantially increase the Company’s production base in Mexico.
In April 2018, Eskandar Maleki joined the board of directors of the Company. Mr. Maleki has a strong track record of building successful global oil and gas companies, most notably, Tullow Oil PLC. As an early strategic investor, board member and, for a time, the largest individual shareholder of Tullow, Mr. Maleki assisted the company’s corporate development as it grew into a leading independent oil and gas exploration and production company.
Renaissance continues to make progress on its journey to become a major Mexican energy producer.