QUEBEC CITY, QUEBEC--(Marketwired - Sep 10, 2013) - Following the report broadcast yesterday in an important Quebec media, Junex (TSX VENTURE:JNX) would like to confirm that, in December 2006, it submitted an offer in response to a Call For Bids made by Hydro-Quebec for the purchase of its Anticosti Island exploration permits. This offer, submitted by Junex to Hydro-Quebec, was published on-line last week by Hydro-Quebec and it is now available for viewing on Junex's website. Listed below is a summary of the principal terms of Junex's offer that was based upon the geological and technical knowledge at that time, which was prior to the discovery of the oil potential of the Macasty Shale:
- A royalty of 3% payable to Hydro-Quebec on future oil production;
- In the event of commercial discovery and at project payout, Hydro-Quebec would have the option, at no cost, to convert its 3% royalty to a working interest of 9%;
- Junex's commitment to spend $250,000 on exploration efforts during the first year, including the reprocessing of Hydro-Quebec's seismic data if required;
- Hydro-Quebec would have a Right of First Refusal to recover the exploration permits if ever Junex decided to abandon any of them.
In January 2007, Hydro-Quebec confirmed to Junex that its offer was not accepted. Nonetheless, later exploration efforts undertaken by third parties on Anticosti Island highlighted the significant petroleum potential of the Macasty Shale, thus creating value for Junex's block of five exploration permits on Anticosti Island.
Junex controls 26.5% of the oil resources initially-in-place on Anticosti Island 1
In October 2007 Junex had acquired 5 exploration permits totaling 233,275 acres, representing about 13.2% of the permitted acreage on Anticosti Island, from the Quebec Ministry of Natural Resources. These permits are principally situated in the Deep Fairway on the island. The evaluation of the petroleum potential of these permits was performed by Netherland, Sewell &Associates, Inc., ("NSAI"), a firm of worldwide petroleum consultants based in Texas, who had placed their Best Estimate of the undiscovered shale oil initially-in-place ("OIIP") volume for the Macasty Shale on Junex's acreage at 12.2 billion barrels (see Junex's September 2011 press release for more details about NSAI's report).
Furthermore, based on NSAI's Best Estimate, the Macasty Shale on Junex's acreage has an average potential of 33.5 million barrels of OIIP per square mile, which is about 2.4 times superior to the average OIIP per square mile calculated for other areas of the island controlled by other operators (based on third party Best Estimates published by these operators). Junex considers that this aspect, combined with greater reservoir pressure on its acreage in the Deep Fairway, substantially elevates the prospectivity of the Macasty Shale on its acreage as compared to areas outside the Deep Fairway.
Junex is a junior oil and gas exploration company that holds exploration rights on approximately 5.2 million acres of land located in the Appalachian basin in the Province of Quebec. The company is in the heart of the Utica Shale gas discovery located in the St. Lawrence Lowlands and holds a significant land-package on the Anticosti Island where an independent report has provided their Best Estimate of the undiscovered shale oil initially-in-place ("OIIP") volume for the Macasty Shale on all five of Junex's permits on Anticosti Island at 12.2 billion barrels. As of June 30, 2013, Junex had a working capital of $14.1 million. In parallel to its exploration efforts in Quebec and expansion of its exploration activities elsewhere, Junex's goal is to achieve positive cash flows from its natural brine and drilling services operations.
Forward Looking Statements
Certain statements contained in this press release may be forward-looking. These forward-looking statements are based on the best estimates available to Junex to date and entail a number of known and unknown risks, uncertainties and other factors that may make the actual results, performance or achievements of Junex differ substantially from the results, performance or achievements expressed or expected in the forward-looking statements. A description of the risks affecting Junex's business and activities is presented under the heading "Risks and Uncertainties" on pages 8 to 11 of Junex's Management discussion and analysis for the year ended December 31, 2012, which can be accessed on the SEDAR Web site at www.sedar.com. There is no guarantee that events forecast in the forward-looking statements will occur, or if they occur, what would be the benefits that Junex would draw from these. Specifically, there is no guarantee about the future financial performance of Junex. Junex assumes no obligation to update or modify such forward-looking statements to reflect new information or any other event. The reader is advised to not place undue reliance on these forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
1 Based upon the publicly-disclosed independent resource evaluations performed for the other companies active on Anticosti Island (Corridor Resources and Petrolia).