Calgary, Alberta--(Newsfile Corp. - May 7, 2024) - Journey Energy Inc. (TSX: JOY) (OTCQX: JRNGF) (the "Company" or "Journey") is pleased to announce that it has entered into an agreement with Spartan Delta Corp. ("Spartan") to jointly develop a block of land in the west shale basin of the Duvernay oil and liquids fairway.
The Joint Venture (the "JV") block of land covers 128 sections in the oil window of the Duvernay where shale thickness is approximately 30-40 meters. The initial working interests for the JV are Spartan 62.5% and Journey 37.5%. The parties currently control 94 sections within the JV block. Spartan has the potential to increase their interest within the JV from 62.5% to 70% with the contribution of additional lands acquired at their cost. The vast majority of the lands controlled within the block have significant tenure exceeding six years, with applicable extensions. On March 20, 2024, Crown lands immediately south of the block were acquired by other industry players for up to $1 million per section.
Spartan will be the operator of the JV. Expenditures within the block will be capped at $30 million in 2024 and $100 million for 2025 on a gross basis. However, expenditures may be increased with the agreement of both parties. The potential within the JV block is defined by the extensive production history from three existing Duvernay wells (Journey 29.17% WI, Spartan 70.83% WI). Duvernay production within the JV block is overlain by liquid-rich glauconitic production, which is expected to be processed through Journey's operated, gas processing facility and gathering system in the Gilby area.
This is a significant venture for Journey, both in terms of potential resource capture and capital expenditures. The Company has, and will continue to, position itself financially to meet the joint development plans throughout the term of the JV. To assist in this alignment, Journey recently closed a $38 million convertible debenture, which provides no principal repayments for five years. This combined with Journey's low net debt; cash flows from Journey's existing production; and the expected future revenues from the expanding power business, will provide sufficient resources to fund the JV commitments, while allowing the Company to execute on its other drilling and optimization projects throughout 2024 and 2025.
Journey looks forward to providing regular updates on its progress in developing this significant resource.
About the Company
Journey is a Canadian exploration and production company focused on oil-weighted operations in western Canada. Journey's strategy is to grow its production base by drilling on its existing lands, implementing water flood projects, and by executing on accretive acquisitions. Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods.
For further information contact:
Alex G. Verge
President and Chief Executive Officer
403-303-3232
alex.verge@journeyenergy.ca
or
Gerry Gilewicz
Chief Financial Officer
403-303-3238
gerry.gilewicz@journeyenergy.ca
Journey Energy Inc.
700, 517 - 10th Avenue SW
Calgary, AB T2R 0A8
403-294-1635
www.journeyenergy.ca
Forward-Looking Information
This press release contains forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.
More particularly, this press release contains forward-looking statements concerning the anticipated use of net proceeds the Offering.
The forward-looking statements are based on certain key expectations and assumptions made by Journey. Although Journey believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Journey can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the condition of the global economy, including trade, public health, and other geopolitical risks; risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks); commodity price and exchange rate fluctuations and constraint in the availability of services, adverse weather or break-up conditions; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Journey's AIF dated March 28, 2024 and in Journey's MD&A for the year ended December 31, 2024, both of which have been filed on SEDAR+ and can be accessed at www.sedarplus.ca.
The forward-looking statements contained in this press release are made as of the date hereof and Journey undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/208340
