CALGARY, ALBERTA--(Marketwired - Dec. 12, 2013) - Atikwa Resources Inc. ("Atikwa" or the "Company") (TSX VENTURE:ATK) wishes to update shareholders on the progress management has made over the past three months and the appointment of three new members to the Board of the Company.
The Company is pleased to announce the appointment of Steve May, Jim Garnett and Mike Stark to the Board of Atikwa Resources Inc. as of Dec. 12, 2013. The three new members to the Board were the same individuals that organized and represented the dissent group of shareholders at the Company's recent AGM on August 31, 2013. With much deliberation over the past month, it is the view of present management that these three gentlemen will be of great assistance to the Company and by the sheer number of votes they were able to garner at the meeting, represent a large group of shareholders of Atikwa. It is management's belief that it is in the best interest of all shareholders and the future success of the Company that these three men play a significant role in advising and assisting management with reorganizing and positioning Atikwa for renewed success.
The New Management team ("New Management") is inheriting a Company with a significant set of challenges going forward. A large amount of corporate debt exists that must be negotiated and settled and a high interest loan in the amount of $2.5 million that was obtained by previous management by providing all the assets of the Company as collateral must be paid out. At present this loan has been called in and management is in discussions with the lender to resolve this matter in the appropriate way.
Presently, the Company is producing approximately 40 barrels per day, down sharply from peak production of over 300 barrels per day. Due to this loss in production the new Board will undertake an internal investigation on all matters concerning operation practices of previous management's actions over the past seven years. New Management intends to implement changes that will ensure increased production.
New Management has been in negotiations with all creditors to date and will continue to work out payment and restructure loans to make Atikwa successful in the future. New Management hopes to have much of this debt eliminated shortly, and by doing so, open the doors to drilling new wells. It is imperative to clean up the balance sheet in order to secure new funding, and the Company has made some important strides towards this goal. We have already:
- Reduced salaries' significantly by over $100,000 per year
- Moved into more reasonably priced office space, saving another $10,000 per month.
The Hansar acquisition that Mr. Kehoe signed back in Sept. 2013 has not been filed yet with the TSX Venture Exchange and it is the view of the new Board that this transaction will be put on hold until such time as more pressing issues have been resolved.
On the positive side, the Company has a significant asset in the Pierson property in Manitoba. This property will be the focus of our efforts to develop new revenues from future drilling, subject to financing. Over the past number of years, the Pierson area has seen great drilling success from many oil companies as they develop this robust field. Local and international oil companies have increase the Initial Production (IP) rates and the number of wells per quarter section has gone from 4 to 6. Fracking techniques have been a key component to the increased IP and higher density of wells. This bodes well for the Company's future. Atikwa presently has between forty and fifty drill locations with this increased density that we feel over time can generate important oil production and cash flow for the Company.
We Seek Safe Harbour
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
President & CEO