Hillcrest Petroleum Ltd (CVE:HRH) (OTCMKTS:HLRTF) told shareholders on Thursday that it has stabilized production from the West Hazel heavy oil field in Saskatchewan at around 150 barrels per day from the beginning of August to the first week of September.
In a shareholder update, the Canadian oil and gas producer said production rates took some time to stabilize after being shut-in for a period during the second quarter due to pandemic-driven low oil prices.
“Current stable production rates are partly due to well work overs and maintenance, funded through the recent equity placement,” said the company.
The oil and gas firm added that a development well is expected to "significantly increase" oil production in the fourth quarter.
Hillcrest said that it received a letter of intent for a C$5 million convertible loan term sheet where the funds are to be funneled into expanding the West Hazel assets, including the development well. The loan note has a first draw of $500,000, with further draws available once 75% of the original tranche is repaid, or earlier if mutually agreed by the parties.
To complement oil and gas production, Hillcrest is leveraging opportunities in clean energy technology with the potential to reduce greenhouse gas emissions through its 50% ownership in ALSET Innovations Inc. ALSET is a tech partnership with rights to exclusively license and market efficient power generation and electric motor technologies in the US and exclusively market the technology in the EU.
The company told shareholders it received conditional approval from the TSX.V for its previously announced ALSET licensing agreement. Hillcrest was granted a license for ALSET technology by Oropass Limited during the last week of August and expects final approval to follow.
Hillcrest said it is “excited” about the potential the “disruptive energy efficiency technology” offers across “a wide range of energy industry” applications. “Initial discussions are underway with the first of several parties whom have indicated interest in the technology,” said the company.
Firms showing interest in the technology include companies in “manufacturing or refitting electric vehicles, manufacturing or operating wind turbines,” and manufacturing or selling “electric generators and installing electrical vehicle charging stations,” said Hillcrest.
"Hillcrest was able to survive oil price volatilities and other challenges with the oil and gas sector by paring down costs, increasing oil production and securing interests in other forms of value and opportunity in the wider energy industry," said Hillcrest CEO Don Currie.
"The company was able to leverage oil production revenues with new opportunities such as the disruptive energy efficiency technology ALSET is licensing and marketing. This provides Hillcrest with a diversified platform from which to potentially add substantial company growth value.”
The Hillcrest boss said that in addition Hilcrest has been able to “retire all previously defaulted loans” and reduce outstanding payables to a combined value of over $1,200,000.
“The company is excited about the current path,” added Currie.
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