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Return Energy Inc (TSXV:RTN)

Summary

Return Energy Inc. is a TSX Venture Exchange listed company based in Calgary, Canada. The company is engaged in the exploration, development and production of petroleum and natural gas in the Western Canadian Sedimentary Basin.

Market Overview

$0.075 (7.140%)
Vol 47,000.00
10 Days Avg Vol 5,783.33
3 Mo Avg Vol 24,545.80
52 Wk Lo/Hi $0.000 - $0.000
YTD Price Gain % -100%
12 Wks Moving Avg 0
200 Days Moving Avg 0
Market Cap 8,291,373

Updated: Market Close, 05/21/2018

Company Background

Return Energy Inc. is engaged in the exploration for and development and production of petroleum and natural gas in the Western Canadian Sedimentary Basin. The Company is focused on light oil development in the Peace River Arch area in northwest Alberta, where it holds predominantly 100% owned existing production, a proven land base ready of development and wholly-owned infrastructure, including a gas processing plant and associated pipeline system. The Company was incorporated under the Alberta Business Corporations Act on March 20, 2006 and has its headquarters in Calgary, Alberta.

Highlights

  • The Company raised over $7 million in two equity financings during 2017.
  • During 2017, the Company consolidated its asset base by acquiring additional operated production at Rycroft from joint interest partners.
  • In April 2017, Return purchased the remaining 50% interest in the Company’s operated Rycroft gathering system and gas plant which provides Return greater flexibility and control over the plant through-put and increases third party processing revenue.
  • The Company acquired over four thousand acres of additional undeveloped land at Rycroft.
  • In April 2018, the initial drilling and completion program at its Rycroft core property north of Grande Prairie, Alberta concluded with the successful drilling and initial testing of two wells.   The first well encountered the Braeburn dolomite of the Charlie Lake formation and, after fracture stimulation, tested 125 BOE/day of light (370 API) sweet oil and associated natural gas.  The well is currently shut-in for initial pressure build-up and equipping operations will be undertaken after spring break-up.  Planning is also underway for the installation of a pipeline to connect 14-27 to the Company’s wholly-owned and operated Rycroft gas plant and, once connected, the well will be capable of producing without restriction.  Pipelining operations are expected to commence post spring break-up.  Thirteen (13) additional drilling locations targeting the Braeburn dolomite have been identified on Return’s existing land holdings.
  • The second vertical well in the program penetrated a 5.5 metre thick Charlie Lake dolomitic siltstone zone approximately thirty metres above the Braeburn member.  After fracture stimulation, swabbing operations resulted in light (380 API) sweet oil rates of approximately 45 barrels of oil per day.  This sets the stage for a future horizontal drilling program using multi-stage fracture stimulation techniques. This same zone is the target of a large-scale horizontal drilling campaign immediately west of Return’s acreage that has been advanced primarily by Tourmaline Oil Corp. and several other third parties over the last four to five years. Twenty two (22) horizontal drilling locations targeting the Charlie Lake dolomitic siltstone have been identified on the Company’s existing land holdings.

Share Structure

As of March 31, 2018
Shares Issued 110,551,651
Warrants(1) 90,353,125
Options 7,100,000
Fully Diluted 208,004,776
(1) Exclusive of conversion of 2,000,000 Preferred Shares, which are variable and tied to market price at the time of conversion. By way of example, the number of Units issuable on conversion of the Preferred Shares , assuming a market price of $0.20, would be 2,000,000 Preferred Shares X $1.00/share ÷ $0.20/share = 10,000,000 Units.  The number of shares issuable on conversion of the Units would be 10,000,000 Common shares plus 5,000,000 warrants, each convertible to one Common Share.  No more than 10% of the Preferred Shares can be exercised at any given time in a 30 day period and the holder can own no more than 10% of the issued shares at any given time.

Other Information

Projects:                                           

Return is focussed on its 100% owned Rycroft oil & gas property, fifty kilometres north of Grande Prairie, Alberta, where it currently produces in excess of 300 BOE/day of light oil and natural gas. The Company has just completed the drilling of the first two of its Triassic Charlie development wells.  Both wells successfully tested light, sweet oil in two distinct members within the Charlie Lake formation, as described below in the highlights section.

Management Profiles

Kenneth M. Tompson, P.Geol

President, CEO and Director

Mr. Tompson is a professional geologist with 35 plus years’ experience in oil and gas exploration, and has been directly responsible for the drilling of several hundred wells - from prospect initiation through to testing, completion and tie-in, and has been credited with a number of discoveries in a variety of geologic environments in both clastic and carbonate reservoirs. Prior to co-founding Return Energy Inc.’s predecessor, DualEx Energy International Inc., Mr. Tompson was the Vice-President of Exploration for Dual Exploration. He joined Dual’s predecessor, Devlan Exploration Inc., in February 2003 as its Vice-President of Exploration. Prior to establishing an exploration consulting practice in February 2001, he was the VP Exploration at Petrobank Energy and Resources Ltd., having joined the company in 1995. He is a member of the Canadian Society of Petroleum Geologists and a registered member of the Association of Professional Engineers and Geoscientists of Alberta.

Garry T. Hides, P.Land

Executive Vice President and Director

Mr. Hides is a professional landman with over 30 years of industry experience, both domestically and internationally. He began his career in 1984 in Chevron Corp’s Calgary office where he spent 13 years in positions of increasing responsibilities as a negotiating landman. In 1997 he joined Petrobank Energy and Resources, where he spent 7 years, ultimately as Vice President, responsible for all land and contract negotiations & management (in Canada and internationally). In 2004 Mr. Hides joined Devlan Exploration as Vice President Land & Business Development. During this period Devlan expanded internationally from a Western Canadian focused company (drilling approximately 40 wells per year). Mr. Hides co-founded Return Energy Inc.’s predecessor, DualEx Energy International Inc., in 2006 with a spin-out of assets from Devlan’s successor company, Dual Exploration. He is a member of both the Canadian Association of Petroleum Landmen and the Association of International Petroleum Negotiators.

Jason Schoenfeld, P.Eng

Vice President Engineering & COO

Mr. Schoenfeld is a professional engineer with 18 years’ experience in operations and production engineering. In addition to managing drilling and completion operations, in both conventional and horizontal/multi-stage frac situations, he has been involved in several acquisition and divestiture evaluations. Prior to establishing his consulting practice in 2012, Mr. Schoenfeld served as the Operations Manager for Westfire Energy and during his tenure there was a key player in growing production from 155 boe/d to 11,500 boe/d. Prior to Westfire, he was Operations Manager at Southpoint Resources after serving as an Operations Engineer at Codeco Consulting. Mr. Schoenfeld began his career at Crestar Energy/Gulf Canada before moving on to Elk Point Resources as Operations Engineer prior to joining Codeco. He is a member of the Association of Professional Engineers and Geoscientists of Alberta.

Lorne Morozoff, CA

Vice President Finance, CFO & Corporate Secretary

Mr. Morozoff is a Chartered Accountant with over 25 years’ experience, the last twenty in the oil and gas industry. Prior to joining Return Energy Inc.’s predecessor, DualEx Energy International Inc., Mr. Morozoff was the Controller of Stratic Energy Corporation. Prior thereto, he held various senior level positions within Nexen Inc. from 2001-2005, including a two year assignment in Yemen. Prior to that he served as a Senior Internal Auditor with the Qatar General Petroleum Corporation in Doha, Qatar from 1997 to 2000. Mr. Morozoff is a registered member of the Institute of Chartered Accountants of Alberta.

Independent Directors:

Robb Tompson, CA.

VP Finance & CFO, Bonterra Energy. 30 + years’ experience

Roy Hudson, LLB.

Partner with DLA Piper (Canada) LLP. 30 + years’ experience

Bradley Porter.

Independent businessman. 30 + years’ oil & gas management experience

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