To back stop its cash flow expectations for the remainder of 2015, Virginia Hills has entered into a physical sales agreement covering approximately 1,116 bbl per day of oil (70% of its forecast average oil production), at an average price of approximately $65.50 per bbl (US to Cdn dollar conversion at 0.82).
Virginia Hills has aggregate lending facilities of $108.0 million that are not due to be reviewed until September 2016. Currently, there is an aggregate of approximately $100.4 million drawn on these facilities.
The board of directors of Virginia Hills approved the grant of an aggregate of 1,927,047 options under the Company’s stock option plan to certain directors, officers, employees and key service providers of the Company with an exercise price equal to the closing price of the common shares on May 25, 2015. The options have a term of five years and vest equally on each of the first, second and third anniversary dates of the grant. Currently, Virginia Hills has a total of 19,724,155 common shares outstanding. On a fully diluted basis, before giving effect to the options, there are a total of 49,645,171 outstanding shares and warrants.
For further information please contact:
Virginia Hills Oil Corp.
Suite 500, 255 – 5th Avenue SW Calgary, Alberta T2P 3G6
President and Chief Executive Officer
Tel: (403) 817-2575 Fax: (403) 817-2599
Chief Financial Officer
Tel: (403) 817-2551 Fax: (403) 817-2599
FORWARD LOOKING STATEMENTS: This news release contains forward-looking statements. More particularly, this news release contains statements concerning Virginia Hills' expectations regarding improvement to the Company's cost structure, the implementation and timing of effect of optimization projects including water flooding and acid fracturing; the implementation of a four well drilling program and the completion of two wells in 2015; the sources of capital the Company will use to funds its 2015 capital program; the average production for 2015 and 2015 exit production rate; future oil prices, operating costs, royalties, transportation costs and operating netbacks for the remainder of 2015. In addition, the use of any of the words "guidance", "initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate", "believe", "potential", "should", "unaudited", "forecast", "future", "continue", "may", "expect", "project", and similar expressions are intended to identify forward-looking statements.
The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including but not limited to expectations and assumptions concerning the success of optimization and efficiency improvement projects, including the water flood projects discussed herein, the availability of capital, current legislation, receipt of required regulatory approval, the success of future drilling and development activities,