Shoreline Energy Corp. (the Company or Shoreline) is pleased to announce that it has acquired non-operating working interest in over 5,000 acres located in the prolific Wattenberg Field, in the Denver-Julesburg Basin ("DJ Basin") for approximately $4.0 million in cash and stock. The acquisition closed on December 21, 2012, increasing Shoreline's acreage in the prolific DJ Basin by over 500 net acres.
Shoreline has acquired an average net revenue interest of 5.3% in a block of land within the same township where area operators including Anadarko Petroleum and Encana Corporation are drilling high impact horizontal wells targeting light oil within the Niobrara and the Codell at vertical depths of between 6800 and 7200 feet. Horizontal wells drilled in this area are completed using multiple stage hydraulic fracturing and have exhibited initial production rates of between 400 and 900 barrels oil equivalent per day. Existing production from historical vertical wells is estimated to be between 25 and 45 barrels oil equivalent per day to Shoreline's interest. Shoreline forecasts that horizontal wells on its newly acquired acreage will be drilled beginning in the late second quarter of 2013.
"We continue to take advantage of attractive opportunities to further increase our asset base in the Wattenberg field." stated Trevor Folk, Chief Executive Officer of Shoreline Energy Corp. "The most recent acquisition immediately adds to our production base while providing significant development potential through the application of proven horizontal drilling and completion techniques. Based on our internal due diligence and data published by area operators for nearby properties, we forecast that during the next year our production and cash flow will expand substantially."
On the land package acquired, there are between 60 and 80 horizontal drilling locations identified. The $4.0 million acquisition price comprises $3.5 million of cash and 129,000 of Shoreline's common shares.