The combined entity will hold over 38 sections of land at predominantly 100% working interests with over 80 potential drilling locations. Newco has, current production of approximately 125boe/day which is expected to increase to over 250boe/day by the end of July 2010 (70% oil and 30% gas) and a drilling program that includes horizontal locations in both the Viking and Sparky formations.
Ranger has signed two separate binding letters of intent with an Alberta based private company, (Privateco) to acquire, through separate purchase and farm in arrangements, a 100% interest in an additional 14.5 sections of land with Cardium and Viking rights adjacent to its existing 8.75 section block.
The combined 23.25 section block contains a prospective Viking horizontal oil project. For the initial Viking development, Ranger has identified 20 horizontal drilling locations, either on or adjacent to lands with Viking oil production. The agreements commit Ranger to drill two horizontal wells on the newly acquired lands.
Ranger will issue a non-convertible promissory note to Privateco in the amount of $5.46m as payment for the acquisition. The promissory note will be due on December 1, 2010.
Blackhawk holds over 15 net sections of land with 10 net sections in the Provost area of Alberta where Blackhawk recently completed its first horizontal Sparky oil well. Four horizontal Sparky locations remain in inventory with one scheduled to be drilled prior to year end.
