Under an agreement signed by the two companies, Torc will acquire 4,750boepd (98% light oil and liquids) of low decline, high netback, light oil producing assets. It will also own freehold mineral title on more than 80 net sections of land.
The company has also identified about 170 net high quality light-oil drilling locations on the acquired assets.
Torc said that the assets will complement its existing operations in southeast Saskatchewan and provide operating and strategic synergies.
The sale proceeds will be initially used by Surge to pay off its debt and for drilling the new Upper Shaunavon discovery and development of Sparky crude oil assets in Alberta.
The transaction is planned to be completed in June 2015, subject to regulatory approval under the Competition Act (Canada).
Torc CEO and president Brett Herman said: "The acquisition complements our light oil platform and will provide a strong and stable cash flow base further strengthening the sustainability of our business model while the high quality drilling inventory will enhance our capital program to create long term value for our shareholders."
Torc has increased its 2015 average production forecast from 13,000boepd to more than 15,400 boepd.
