Strategic Oil & Gas Lays Out Plans For 2017

Strategic Oil & Gas Lays Out Plans For 2017

By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, February 7, 2017

Oil and gas prices are expected to remain steady in 2017 as various oil producing countries resort to production rationing as per OPEC’s declaration in late 2016. However, at the very same time, Companies need to remain cautious about protecting their margins and growing their businesses. Strategic Oil & Gas Ltd. (TSX-Venture:SOG) is a Canadian junior oil and gas company which has ambitious plans for 2017. The company has laid out its plans for the new year and provided an update on the activities carried out in 2016. Strategic Oil & Gas also reported that it met its exit target for 2016 as it exceeded the guidance of 2,800 boe/d. The company expects output to reach 4,000 boe/d by the end of the first half of 2017.


In the corporate update, The Company reported that during the fourth quarter of 2016, they drilled four Muskeg wells on a pad. The first two wells are currently tied in and are in production mode. These wells are currently producing significantly above the company's type curve. The third Muskeg well 2-27 has been equipped, tied in and producing 85 boe/d while still cleaning up. The completion program for the fourth well on the pad was delayed due to operational issues.

Strategic Oil & Gas is paying attention to not only operational plans but also to financial arrangements. The company has allocated $30 million for capital expenditure during the first half of 2017. These funds will primarily be used for drilling six Muskeg wells at Marlowe adjacent to the wells drilled during 2016. Additionally, the funds will also be deployed for building infrastructure such as roads and pipelines for connecting Muskeg wells.

The company is carrying out a non-brokered private placement of up to 330 million company shares to finance its operational and other activities. The stock has been priced at $0.12 per share to raise up to $40 million. A major portion of the placement is expected to be picked up by insiders.

The Company is looking to improve its operational and financial efficiency as well. In the current year, Strategic Oil & Gas plans to pay its semi-annual interest payment on outstanding convertible debentures in kind. It also plans to issue additional debentures worth $3.7 million.

Shares of SOG are currently up over 4% on a year-to-date basis. After posting a modest loss of 7% in value in the past 12 months, the stock is starting to claw back some on higher energy prices. With the company’s ambitious plans for the year, shares should remain on investor’s watchlists.

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