Cequence Energy Announces Asset Sale and Operations Update

CALGARY, April 19, 2018 /CNW/ – Cequence Energy Ltd. (“Cequence” or the “Company”) (TSX: CQE) is pleased to announce that it has disposed of its remaining assets located in north eastern British Columbiaeffective April 1, 2018, for nominal consideration.

Upon closing of this transaction, Cequence becomes a pure Alberta operating entity with a corporate April, 2018 Alberta Energy Regulatory Licensee Liability Rating of 5.7.  In the fourth quarter 2017, production associated with the B.C. assets was approximately 663 boe/d with an operating loss of $172,000 for the same period due to low commodity prices.  The Company’s asset abandonment and reclamation obligation for B.C. at December 31, 2017 was $8.8 million or 23% of Cequence’s total reported year end 2017 liability of $38.5 million.

Operations Update:

Field production estimates for the first quarter of 2018 have averaged approximately 6,900 boe/d of which 6,250 boe/d (17% liquids) was derived from its Alberta properties.  The Company’s three gross, two net winter Dunvegan oil wells were completed and pipeline connected in the first quarter of 2018 with in-line production commencing via artificial lift at the end of March.  As a result of the unusual cold weather conditions in late March and early April the existing volume of remaining completion water created start-up challenges with freeze offs and pipeline hydrates.  Since start-up, over a ten calendar day period, an estimated 6,750 bbls of gross oil has been produced from 2 gross (1.5 net) oil wells with consistent run times being achieved for the past 7 days.  The following are the recent 24 hour in line separator rates:

The above three wells all had lateral lengths greater than 2 km with an average of 39 slick water frac stages placed.  Water production associated with the wells are still below fracture treatment load recovery.  The original estimated Corporate IP 30 rate per well was 300 bbl/d.

With spring break up conditions occurring, consistent run times for the new wells may be challenging.  In order to accommodate the increased new oil volumes and achieve stable run times, base Dunvegan oil production has been temporarily curtailed.  While management is very encouraged by the early production results from these wells, such results are not necessarily indicative of long-term performance or of ultimate recovery from the wells.

Cequence estimates there are approximately 26.5 net Dunvegan oil locations remaining on its land.

About Cequence
Cequence is a publicly traded Canadian energy company involved in the acquisition, exploitation, exploration, development and production of natural gas and crude oil in western Canada. Further information about Cequence may be found in its continuous disclosure documents filed with Canadian securities regulators at www.sedar.com.