CALGARY, ALBERTA--(Marketwired - June 25, 2013) - BlackPearl Resources Inc. ("BlackPearl" or the "Company") (TSX:PXX)(OMX:PXXS) announced today that, due to recent volatility in the debt capital markets, it has decided not to proceed with its proposed US$350 million second-lien senior secured term loan facility at this time. The Company will re-evaluate its financing options when capital markets stabilize. Construction of the Onion Lake thermal enhanced oil recovery project will be deferred until alternative financing is established; however, engineering and certain long lead planning will continue.
Oil and gas production in the second quarter is expected to average between 9,500 and 10,000 barrels of oil equivalent (boe) per day, an increase from the first quarter production of 9,087 boe per day. The increased production in conjunction with improved heavy oil differentials will have a positive impact on our second quarter revenues and cash flows. The increase in production is attributable to first quarter drilling at Onion Lake as well as improved productivity from our steam-assisted gravity drainage (SAGD) pilot well at Blackrod. We implemented a less restrictive sand control program late in the first quarter which has resulted in the pilot well averaging in excess of 600 barrels of oil per day during the month of June. We expect the pilot well to stabilize at 400 to 500 barrels of oil per day. Once the first well is stabilized we will initiate steam to our second well pair to test a different completion technique.
At Onion Lake, we have received technical approval from the Saskatchewan government for the 12,000 barrel per day thermal EOR project.
John Festival, President of BlackPearl, commented, "Our thermal projects at both Blackrod and Onion Lake are significant mid to long term value generators for the Company. It is prudent to initiate these projects on a solid financial footing and, until the debt markets stabilize, we have decided to defer our proposed debt financing."
Our second quarter operating and financial results will be released on August 8, 2013.
This news release contains certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", "target", "forecast" or similar words suggesting future outcomes. In particular, and without limitation, this press release contains forward-looking statements pertaining to alternative financing for the Onion Lake thermal project, the estimated range of daily oil and gas production volumes during the second quarter, the anticipated stabilized production rate for the Blackrod SAGD pilot well and the timing for the commencement of steam injection in the second well at Blackrod.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. Further information regarding these risk factors may be found under "Risk Factors" in the Company's most recent Annual Information Form. Readers are cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will be realized. Accordingly, readers are cautioned that the actual results achieved will vary from the information provided herein and the variations could be material. There is no representation by the Company that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained in this release are made as of the date hereof, and the Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement.