The assets involved in the cash-cum-stock deal transaction are 201 (152 net) sections of land, with proved reserves of around 6.3MMBoe and proved plus probable reserves of about 8.1MMBoe, as of 31 December, 2017. In particular, the acquisition will add 77 sections of Montney rights to Strath Resources’ portfolio.

Also part of the deal are 62mmcf/d of owned processing capacity at the Pembina 8-11 and Cenovus 1-36 Resthaven gas plants to go along with 29mmcf/d of firm service on TCPL and 4,000bbls/d of firm liquids transportation.

Strath said that the assets it will acquire will directly offset and complement its existing Kakwa property in Alberta.

The company said that the increased processing and transportation capacity from the acquired assets enables further growth and brings down combined operating and transportation costs to about $11/boe.

It also said that the expanded land base following the deal expands its scale to more than double its drill inventory in the Montney, Dunvegan, and Wilrich assets.

Paramount Resources said that it is selling the assets as they are no longer important for its business and that the sale will enable it to focus on developing its core Montney assets at Karr and Wapiti in the Grande Prairie Region and Montney and Duvernay assets in the Kaybob Region.

The Canadian petroleum company said that the sale will also allow it to capture the upside of Resthaven/Jayar through Strath’s development of the combined Montney asset-base in the area.

Paramount Resources corporate development vice president Rodrigo Sousa said: “We believe this transaction provides our shareholders with a compelling opportunity to realize meaningful value on our assets in the Resthaven / Jayar area.

“The cash consideration being received will be re-deployed to continue to develop and grow production from our core assets and further strengthens our already strong balance sheet and liquidity position.”

The transaction will see Paramount Resources receive a cash payment of C$170m (129.08m) and issuance of 85 million Strath common shares along with 10-year warrants to buy 8.5 million Strath common shares.

Subject to customary closing conditions, the deal is anticipated to be completed in early July, after which Paramount will own a 16% stake in Strath.