Strategic Oil & Gas has completed the acquisition of the shares of a private company, Steen River Oil & Gas, for approximately $10.5m in cash and share consideration plus the assumption of $3.5m in debt for an enterprise value of $14m.
The company has acquired high quality light oil assets, with a substantial land base and facilities focused in northwest Alberta.
Steen is the primary operator in the area with over 110 sections of undeveloped land, oil and natural gas facilities and other infrastructure.
This area has been under-exploited to date with minimal seismic or drilling activity.
Steen’s primary asset is the company owned and operated light oil field producing from the Keg River zone.
Current production at the area is approximately 250boe/d with an additional 250bbls/d of light oil shut-in as a result of a pipeline break.
Based on 500boe/d of production, the acquisition reflects a flowing barrel cost of $28,000/boe/d.
The production is expected to be back on stream in the first quarter of 2011, at which time this acquisition will add an incremental 500boe/d of production to Strategic, of which greater than 2/3 is light oil.