The assets are Cardium focused in the Pembina Area of Alberta, including upper zones in the Belly River and Edmonton Sands, with a production base that is complementary to current Bonterra acreage, and which provides additional inventory of long-term drilling locations, Calgary, Alberta-based Bonterra said in a statement today.
Bonterra said the cash consideration it will pay is to be initially financed by a combination of working capital and debt.
The acquisition will have an effective date of January 1, 2015 and is expected to close on or before April 15, 2015.
The assets have a production capacity of 1,800 boe/d, 86 percent of which is oil and natural gas liquids.
The assets have proved reserves of 9.9 million boe, as well as proved and probable reserves of 13 million boe.
“The acquisition is consistent with Bonterra's strategy to capitalize on opportunities to enhance the quality of its asset base, operations and overall returns to the shareholders,” the company said in the statement.
The assets are directly adjacent to Bonterra’s existing infrastructure, allowing for numerous facility consolidation opportunities which can reduce overall operating costs.
Pro-forma the acquisition, Bonterra's proved plus probable reserves increase 16 percent to 93.3 million boe from 80.2 million boe, and the company anticipates a minimal increase in 2015 capital spending to $70 million from $58 million.
The company has identified 132 net potential low-risk, high-quality horizontal drilling locations of which only twelve have been assigned reserves in the current reserve report.
Shares rose 1.9 percent to C$45.36 at 9:40 a.m. in Toronto, paring losses over the past six months to 30 percent.