The assets, which include wells and associated production facilities, are currently producing approximately 500bbls per day of oil.
The purchase price net of standard closing adjustments is $19.5m, and it is anticipated that the acquisition will close before the end of this month.
The acquisition includes 10.2 gross sections of crown land and operated production in the Frog Lake area directly adjacent to Twin Butte’s existing Frog Lake operations.
These lands are entirely covered with three dimensional seismic which is included with the acquisition, and the company said it has identified numerous recompletion opportunities and a minimum of 50 drillable locations on the lands.
Twin Butte’s estimates of proven and probable reserves associated with the acquisition are 1.4 million boe based on internal evaluation as at 1 October 2010.
The company intends to finance the acquisition from its existing corporate credit facility which post closing the transaction is anticipated to be increased from its current $120m to $128m.
Year-end 2010 net debt pro-forma the acquisition is anticipated to be approximately $96m.
Twin Butte is a Canadian energy company involved in the exploration, development and production of natural gas and crude oil in western Canada.
