Avalon Oil and Gas Inc., Minneapolis, (OTCBB: AOGS) has acquired a 100% leasehold interest in 1,600 acres in Canadian County, northwestern Oklahoma.

Avalon and Crown Exploration, Avalon's joint-venture partner, expect to drill a well in the next 90 days. The acquired leasehold, in the Sooner Trend Field, provides approximately 10 potential drilling locations.

Separately, Avalon has closed the purchase of a 100% working interest in 2,400 acres in Canadian County, Okla., from Sooner Trend Leasing LLC for 48 million restricted Avalon common shares.

Clayton Williams Energy Inc., Midland, Texas, (Nasdaq: CWEI) has closed the sale of leasehold interests in two leases in the Breton Sound area of the Gulf of Mexico, offshore Louisiana, to an undisclosed buyer for net proceeds of approximately $21 million.

The assets sold include a 10% nonoperated working interest in four wells and a production platform. The company's net daily production from these wells averaged approximately 72 barrels of oil and 2.8 million cubic feet of gas.

Curlew Lake Resources, Langley, British Columbia, (Toronto Venture: CWQ; Pink Sheets: CWLXF) has acquired a 100% working interest in 11,590 acres of oil and gas leases in the Antelope Valley area of Eureka County, Nevada, from Royalon Prospection.

Dune Energy Inc., Houston, (Amex: DNE) reports a third-party lawsuit involving Voyager Partners Ltd. interests has delayed the closing of Dune's proposed acquisition of certain Voyager properties in the Barnett Shale in the Fort Worth Basin, northeast Texas.

Dune is not a party to the lawsuit. Unless Dune and Voyager amend the agreement, it may be terminated by either party on Sept. 30.

El Paso Production Holding Co., a subsidiary of El Paso Corp., Houston, (NYSE: EP) has closed the acquisition of Denver-based Medicine Bow Energy Corp. for $834 million in cash.

The adjusted purchase price of $834 million is primarily attributable to Medicine Bow's acquisition of incremental interest in Four Star Oil & Gas prior to closing. El Paso's ownership of Four Star at closing is 43.1%, up from 38.6% when the transaction was announced.

Estimated proved reserves associated with the Medicine Bow acquisition are 383 billion cubic feet equivalent, and estimated average daily production is 103 million cubic feet equivalent per day.

Medicine Bow's properties are 68% proved developed producing and 65% gas from 300 operated wells with a current reserve life of 10.2 years. It holds acreage in the Rockies and East Texas and operates in the Midcontinent, San Juan Basin, Permian Basin and the Gulf Coast.

Approximately 130 billion cubic feet equivalent of proved reserves and 27 million equivalent of daily production were owned directly by Medicine Bow. Through its ownership interest in Four Star, Medicine Bow held approximately 226 billion equivalent of proved reserves and approximately 68 million equivalent of daily production, net.

"We are excited to increase our presence in the Rockies, and we expect to retain the majority of Medicine Bow's talented staff as well as its existing office in downtown Denver," says Lisa Stewart, president of El Paso's production and non-regulated operations.

The acquisition was financed through a five-year credit facility and existing cash on hand. Petrie Parkman & Co. advised Medicine Bow on this transaction.

Encore Acquisition Co., Fort Worth, Texas, (NYSE: EAC) plans to purchase the outstanding common stock of Oklahoma City-based Crusader Energy Corp. for $93.5 million plus an additional $14 million for Crusader's working capital, for a total deal value of $107 million.

The $14 million is from Crusader's sale of certain assets to Crusader Energy II LLC. Crusader's assets are primarily in the Anadarko Basin and the Golden Trend areas of Oklahoma, as well as in the Texas Panhandle and north Texas.

In a separate transaction, Encore plans to purchase interests from a private seller in the Williston Basin in Montana and North Dakota. This transaction brings the total purchase price for both transactions to approximately $123 million.

In the two deals, Encore estimates it will acquire total proved reserves of 48 billion cubic feet of gas equivalent (65% gas; 68% proved developed producing). Current net daily production is estimated at approximately 10.5 million equivalent.

The reserves have an estimated life of 12.5 years. The acquisitions include 37,352 net acres of undeveloped leasehold.

The transactions were expected to close in September and this month. Encore will fund the purchases from its $450-million credit facility.

Crusader was owned by chief executive officer David D. Le Norman, and Kayne Anderson Energy Fund II, a private-equity fund managed by Kayne Anderson Capital Advisors.

Crusader Energy II will be a newly formed E&P capitalized by Le Norman and Kayne Anderson, and operated by Crusader I management. The assets to be transferred to Crusader Energy II prior to closing the Encore deal primarily consist of land-holding.

Lehman Brothers was financial advisor to Crusader.

Italy's ENI SpA (NYSE: E) has bought two subsidiaries of Armstrong Oil & Gas, gaining exploration assets in the North Slope of Alaska and total reserves of more than 170 million barrels of oil.

The acquired assets include 104 blocks onshore and offshore in the Beaufort Sea, northern Alaska, two oil fields in pre-development phase and numerous exploration prospects.

A deal value was not disclosed. Petrie Parkman & Co. advised Armstrong on this transaction.

Privately held, Dallas-based Exco Resources Inc., dba TXOK Acquisition Inc., has purchased oil and gas production companies of Oneok Inc., Tulsa, Okla., (NYSE: OKE) for $645 million.

The purchase includes oil and gas assets in four fields in Oklahoma and Texas with estimated reserves of approximately 240 billion cubic feet of gas equivalent.

"With this transaction we will exit the oil and gas production business and will focus our attention on our other businesses," says David Kyle, Oneok chairman, president and chief executive officer.

Oneok plans to use after-tax proceeds of some $500 million from the sale to reduce debt, and has agreed to provide transition services to TXOK. It is anticipated that substantially all of the Oneok production employees will be offered positions with TXOK.

Standard & Poor's Ratings Services kept Oneok's BBB+ rating on CreditWatch negative following the divestment announcement. Oneok had about $2.4 billion in debt as of June 30.

"The sale of Oneok's oil and gas production asset should improve the company's overall business risk profile," says S&P credit analyst Tobias Hsieh. "In addition, the sales proceeds should offset some of the debt leverage incurred from purchasing the natural gas liquids business owned by several Koch Industries Inc. companies for about $1.35 billion in May."

However, resolution of the CreditWatch listing may take a few more weeks, the agency adds.

Privately held, Dallas-based Exco Holdings Inc. has approved an equity buyout of the company by Exco Holdings II Inc., a newly formed corporation that will be controlled by a group of investors led by Douglas H. Miller, Exco chairman and chief executive officer. Upon consummation, Exco Holdings would become a subsidiary of Exco Holdings II.

Fellows Energy Ltd., Broomfield, Colo., (OTCBB: FLWE) plans to purchase a gas-producing field in Carbon County, Utah, for an undisclosed sum. The field includes 4,879 net acres with three gas wells producing approximately 30 million cubic feet per month.

Houston American Energy Corp., Houston, (OTCBB: HUSA) has acquired a 4.4% working interest in the 500-acre Hog Heaven prospect in Jim Hogg County, Texas.

Houston American will pay 5.8% of costs to casing point on the first well. The primary objectives are the Pettus, Hockley and Yegua formations.

Separately, Houston American has acquired a 6.25% working interest in the 425-acre Sugarland prospect in Vermilion Parish, La. The initial well on this prospect will be drilled to 12,800 feet.

Houston-based Mariner Energy Inc. plans to acquire the offshore Gulf of Mexico operations of Forest Oil Corp., Denver, (NYSE: FST) for 0.8 Mariner share per Forest share in a deal valued at $1.17 billion.

Forest will distribute the Mariner shares to its investors. Mariner plans to go public later this year. From Forest, it will gained proved reserves of 344 billion cubic feet equivalent.

Mariner is Gulf-focused; Forest's assets will be wholly onshore after closing. "The spin-off will permit each management team to more clearly focus its efforts on the activities and types of assets that have made them successful," says H. Craig Clark, Forest president and chief executive.

Scott D. Josey, Mariner chairman and CEO, says the transaction will more than double Mariner's asset base in the Gulf of Mexico.

Eric Pipa, an analyst with Morgan Stanley, says that, after closing, Forest will have proved reserves of 1.1 trillion cubic feet of gas equivalent and production of 267 million equivalent per day. Its proved reserves will be concentrated onshore North America, including Canada, Alaska, its Western U.S. unit and its Southern U.S. unit. Its reserve-life index will increase to 11.4 years, up from eight, Pipa says.

Mariner will have proved reserves of 615 billion equivalent and production of 319 million equivalent per day from the Gulf and the Permian Basin.

Citigroup Corporate and Investment Banking and Credit Suisse First Boston LLC were financial advisors and JP Morgan Securities Inc. provided advisory services to Forest. Lehman Brothers Inc. was advisor and provided a fairness opinion to Mariner.

Pipa estimates Forest will receive approximately $3.40 per thousand cubic feet of gas equivalent from Mariner for the Gulf reserves. Based on Forest's pre-announcement closing price of $46.17, Forest was trading at approximately $2.62 per thousand equivalent. Shares of Forest jumped upon the news to as much as $52.

"We commend management for finding a creative method of monetizing a portion of its asset base at a price well above that reflected in the stock price prior to deal announcement," Pipa says. "However, with the stock up some 8% following the deal announcement, it appears the implied upside from the maneuver has been quickly discounted."

Pipa rates Forest's stock Underweighted and says XTO Energy (NYSE: XTO) is a better buy.

Mariner's $100 million of debt will jump to $350 million following this deal. The current estimated value per thousand cubic feet of gas equivalent for its Gulf of Mexico reserves is $3.13, giving Mariner an implied enterprise value of $1.5 billion, according to Pipa.

John Herrlin, an analyst with Merrill Lynch, says the transaction is a "mixed bag" for Forest, as it will have a negative near-term impact on financial metrics, but favorable long-term benefits.

"Forest has been in restructuring mode for some time and after lots of portfolio shuffling, there is now much greater clarity on where its management attention and capital will be directed...," Herrlin says.

Herrlin adds that by spinning off the Gulf assets, Forest will have less risk in a longer-lived asset base and greater predictability in earnings and cash flow because of the lower cost base and the development focus of its remaining onshore properties.

Standard & Poor's has given Forest's debt a rating of BB- and put the company on CreditWatch with negative implications, citing concern that Forest's spin-off of Gulf assets will lead to an increased debt-to-EBITDA ratio, as well as diminish Forest's near-term ability to generate free cash flow.

Maritech Resources Inc., The Woodlands, Texas, subsidiary of Tetra Technologies Inc., (NYSE: TTI) has acquired interests in the offshore and inland waters of the Gulf Coast region from Devon Energy Corp. for approximately $70 million, consisting of $66 million of assumption of abandonment liability and $4 million of cash.

With adjustments, Maritech received a net settlement of $18.3 million in cash at closing. The deal involves 43 fields (22 operated and 21 nonoperated).

In another deal, Maritech has acquired Timbalier Bay Field offshore Louisiana from Pioneer Natural Resources USA Inc., Dallas, (NYSE: PXD) for approximately $67.6 million, consisting primarily of cash plus the present value of the assumed associated abandonment liabilities. Maritech paid Pioneer $500,000 and is to pay $4.4 million by July 2006.

Pioneer made a second Gulf of Mexico divestment of an inland bay property for total proceeds in the two deals of $77 million. This divestment brings Pioneer's year-to-date sales proceeds to approximately $300 million.

New Century Energy Corp., Houston, (OTCBB: NCEY) plans to acquire an additional 7.25% working interest in the Wishbone Field in McMullen County, Texas, bringing its total ownership in the field to 13.45%. Closing is expected by the end of September. US Enercorp Ltd. is field operator.

Norsk Hydro ASA, Oslo, Norway, (NYSE: NHY) plans to acquire Houston-based, Gulf-focused Spinnaker Exploration Co. (NYSE: SKE) for $65.50 per share, totaling $2.45 billion in cash plus assumption of $110 million of net debt in a deal valued at $2.56 billion.

The transaction is expected to be completed in the fourth quarter. Randall & Dewey, a division of Jefferies & Co., and Credit Suisse First Boston were advisors to Spinnaker.

Spinnaker's production is some 23,000 barrels of oil equivalent per day and its total reserves are 129 million barrels of oil equivalent, all in the Gulf of Mexico. It has an extensive seismic database covering most of the Gulf and significant exploration acreage. It also has exploration positions in Nigeria.

Hydro has current production of some 575,000 barrels of oil equivalent per day. It expects to fund the acquisition with cash on hand.

Roger Jarvis, Spinnaker chairman and chief executive, says, "This transaction allows Spinnaker Exploration shareholders to realize substantial and immediate value at an attractive premium and gives Spinnaker Exploration employees the opportunity to join a new, successful team."

Following closing, Hydro expects 2005-08 production to be 40% international.

Eivind Reiten, Hydro president and chief executive officer, says, "The acquisition is an important breakthrough in Hydro's international growth strategy. Hydro's industry-leading expertise in deepwater exploration and production, combined with Spinnaker's unique skills and acreage position in the region, will enable us to develop these prospects profitably in a stable and attractive fiscal environment."

Jay Saunders, an analyst with Deutsche Bank, says Norsk Hydro's plan to buy Spinnaker sets a new high-water mark on acquisition prices. "At $65.50 per share the premium comes to 34% on a stock that rose 10% during the past week and a half." Spinnaker's most prominent asset is the deepwater Front Runner Field.

He calculates the deal at $41.29 per proved barrel and $111 per 1,000 barrels per day of production-more than double that of recent deals. "Adding expected probable, possible and potential reserves of 77 million barrels of oil equivalent the price falls to a still-high $19.80. Clearly this is a strategic move from largely state-owned Norsk, which would get an extensive seismic library from Spinnaker and important infrastructure access in the eastern Gulf," he says.

"The high price, of course, is positive for anyone with GOM assets. Pioneer Natural Resources, which is exiting the GOM, is timing its sale well. Kerr-McGee has a package of onshore and shelf assets for sale that we think will go expensively as well."

Standard & Poor's Ratings Services reports its outlook on Norsk Hydro's A- debt remains unchanged.

"Norsk Hydro currently enjoys considerable financial flexibility, with unadjusted net financial debt close to zero at the end of June 2005," says S&P credit analyst Karl Nietvelt. The premium being paid is a negative "but one needs to take into account current forward prices of $60 to $65 per barrel. Norsk Hydro expects to hedge its production of some 23,000 barrels per day for some years," he adds.

"The negative outlook on Norsk Hydro reflects our concerns about the company's ability to replace oil and gas reserves competitively, halt the decline in its reserve life over recent years, and build a portfolio of international upstream operations."

Orbit Exploration Inc., Oklahoma City, a subsidiary of Orbit Petroleum Inc., (Pink Sheets: OBPT) has acquired 1,072 acres of the Hawkins Ranch Live Oak Bayou gas field in Matagorda County, Texas. The lease consists of four shut-in gas wells, one saltwater-disposal well and two new well locations.

DV Consulting Inc. provided the initial funding of approximately $450,000 for the acquisition and development. In exchange, DVC will have a 22.5% initial working interest in the lease.

Silver Star Energy Inc., Los Angeles, (OTCBB: SVSE) and Fidelis Energy Inc. (OTCBB: FDEI) have agreed to suspend merger discussions for at least one year. Silver Star's management feels it is adequately positioned to grow on its own.

Terax Energy Inc., Austin, Texas, (OTCBB: TERX) has acquired a 100% working interest in an additional 2,000-acre block in Comanche County, Texas, allowing Terax to drill in the Barnett Shale formation of the Fort Worth Basin.

Terax's new total lease position is approximately 18,000 acres in Erath, Comanche and Hamilton counties, Texas.

United Heritage Corp., Cleburne, Texas, (Nasdaq: UHCP) reports it was notified by Imperial Petroleum Inc. that an Oct. 14, 2004, merger plan has been terminated. The merger was to be effective Feb. 1, 2005, but was not consummated.

United Heritage has land-holdings in South Texas.

Whittier Energy Corp., Houston, (OTCBB: WECP) has sold its interest in the Big Escambia Creek Field in Escambia County, Ala., for $4.2 million, to an undisclosed party.

The company acquired a minor nonoperated working interest in approximately 18 wells in the field as part of its acquisition of Rimco Production Co. Inc. The asset is noncore to Whittier.

Whittier attributed approximately 2.7 billion cubic feet of gas equivalent in net proved reserves to the field and net production of approximately 610,000 cubic feet of gas equivalent per day.

Woodside Energy (USA), a subsidiary of Australia-based Woodside Petroleum Ltd., (Australia: WPL) has acquired Houston-based Gryphon Exploration Co. for approximately US$297 million.

Privately held Gryphon has 72 billion cubic feet equivalent of proven reserves and 114 billion equivalent of proven-plus-probable reserves. The assets are in the Gulf of Mexico and 86% gas.

Additionally, Gryphon had licensed approximately 2,300 offshore blocks (19,350 square miles) of highly contiguous 3-D pre-stack time-migrated seismic data. Gryphon also owns interests in 118 leases, 95 operated, totaling more than 400,000 gross acres (300,000 net) with 80 prospects identifying 2.5 trillion equivalent of potential.

The company has four exploration wells in progress and production from its 15 fields, 11 of which are operated, was about 30 million cubic feet equivalent per day at the end of June.

Woodside chief executive Don Voelte says the deal builds upon the company's existing Gulf of Mexico interests, offering it a diverse portfolio across the shelf and deep water.

"It capitalizes on the alliance we formed with (Louisiana-based start-up) Explore Enterprises earlier this year and builds Woodside's position in a region we have identified as a core area of interest," he adds. While Gryphon's management team will not join Woodside, the employees will be retained.

Gryphon was formed in October of 2000 through equity investments made by Warburg Pincus, Cheniere Energy Inc. (Amex: LNG) and Gryphon's management team.

Unicorp Inc., Houston, (Pink Sheets: UCPI) has acquired an additional 23% working interest in the Abbeville Field in Vermilion Parish, La. This acquisition brings the company's total working interest in the field to approximately 60%.

E&P A&D-Canada

Anderson Energy Ltd., Calgary, (Toronto: AXL) has completed the acquisition of Aquest Energy Ltd. (Toronto: AEX) for 0.31 Anderson share per Aquest share.

Aquest had average production of 1,944 barrels of oil equivalent per day from its properties in the Cardiff and Sylvan Lake areas of Alberta. Additional details of the transaction were not disclosed.

Battleford Capital Inc., Calgary, (Toronto Venture: BAT) plans to acquire Captain Energy Inc. for approximately C$400,000.

Upon closing, Battleford will be an oil and gas company with an initial asset of an undivided 100% working interest in 1,280 acres in the Blackfoot area of eastern Alberta that includes one shut-in well and numerous drillable locations.

Battleford intends to drill five wells at 100% working interest on land.

Canadian Natural Resources Ltd., Calgary, (Toronto, NYSE: CNQ) plans to sell 3.9 million units of Freehold Royalty Trust at C$18.50 each for estimated proceeds of C$71.4 million.

Following closing, Canadian Natural will no longer hold interest in Freehold. RBC Capital Markets, CIBC World Markets Inc., Scotia Capital Inc., FirstEnergy Capital Corp. and Peters & Co. Ltd. are agents.

Castle Rock Petroleum Ltd., Calgary, (Toronto Venture: RCK) has acquired a private company for C$4.3 million, including C$2.6 million in cash and 1.1 million common shares at C$1.60 each.

The acquired company's operations are in southern Alberta and produce approximately 75 barrels of oil equivalent per day. Proven reserves are 152,900 barrels of oil equivalent, giving the acquisition a cost of C$20.93 per proved barrel of oil equivalent, according to Castle Rock.

Chirripo Resources Inc., Calgary, (Toronto Venture: CHO) reports that no acceptable offers have been tendered in the corporate strategic-alternate process this summer.

The management and board will continue to identify and evaluate potential alternatives. The company is continuing to execute its business plan for 2005.

Churchill Energy Inc., Calgary, (Toronto Venture: CEI) plans to purchase 952781 Alberta Ltd. for C$200,000 in cash and 90,000 Churchill common shares. The acquisition is expected to close by mid-September.

952781 has a 4% working interest in nine sections of land in the Bolton area of Alberta where Churchill currently has an interest.

Crescent Point Energy Trust, Calgary, (Toronto: CPG.UN) has entered agreements with one private company and two public Alberta companies to acquire assets in southeast Saskatchewan for approximately C$45.1 million.

The deals are expected to close by the end of September and will be funded with the sale of 235,000 trust units and borrowing C$40.5 million from bank lines.

The assets have aggregate production of approximately 875 barrels of oil equivalent per day and are 96% operated with an average working interest of 86% on 21,000 gross acres (18,000 net) of undeveloped land.

Proved reserves are approximately 1.5 million barrels of oil equivalent, giving the acquisition a cost of C$30.06 per proved barrel equivalent, according to Crescent Point.

The proved reserve life is 4.7 years.

Deep Resources Ltd., Calgary, (Toronto Venture: DEP) has closed the acquisition of privately held Dragonheart Energy Inc. for C$17.7 million, including C$7 million in cash and 10.7 million Deep common shares.

Dragonheart held nonoperated working interests in sweet-gas properties in the east-central, Greencourt/Whitecourt and Worsley areas of Alberta.

The acquisition includes proved gas reserves of 2.3 billion cubic feet and proved-plus-probable reserves of 4.1 billion, giving the deal an acquisition cost of approximately C$21.05 per barrel of oil equivalent, according to Deep Resources.

Estimated June 2005 production was 2.10 million cubic feet of gas per day. Dragonheart also owns approximately 29,100 gross acres of undeveloped land.

The acquisition was financed with cash on hand and increased bank credit facilities. Deep Resources estimates its daily production will now be approximately 1,000 barrels of oil equivalent as a result of behind-pipe production being tied in.

Sayer Securities Ltd. was financial advisor to Dragonheart.

Esprit Energy Trust, Calgary, (Toronto: EEE) has closed the acquisition of a small private oil and gas producer for approximately C$7.1 million.

The company's only asset represents the remaining minor interest in the Berry property in southern Alberta acquired by Esprit on Aug. 9 through the purchase of two other private producers.

Esprit funded this transaction with part of the proceeds from its C$100-million, 6.5% convertible extendible unsecured subordinated debt offering in July.

Geocan Energy Inc., Calgary, (Toronto: GCA) has completed the acquisition of Calgary-based Assure Energy Inc. (OTCBB: ASURF) for C$48.3 million, including approximately C$20.5 million of assumed debt and other fixed obligations, and approximately 19.3 million Geocan common shares.

The acquisition gives Geocan daily average production of approximately 3,000 barrels of oil equivalent and 105,000 net acres of undeveloped land.

Assure's production is approximately 1,050 barrels of oil equivalent per day and the company has proven-plus-probable reserves of 3.68 million barrels of oil equivalent. The acquisition cost is approximately C$12.25 per barrel of oil equivalent of proven-plus-probable reserves, according to Geocan.

Mustang Capital Partners Inc. was financial advisor to Geocan, while Haywood Securities Inc. was financial advisor to Assure.

Kereco Energy Ltd., Calgary, (Toronto: KCO) has acquired a 50% interest in 38,340 gross acres of undeveloped land in northeastern British Columbia, bringing Kereco's total contiguous land position in the area to 32,620 net acres. Additional details of the transaction were not disclosed.

King Energy Inc., Calgary, (Toronto Venture: KNG) plans to acquire a package of operated, medium-gravity oil properties in its core area of Provost, Alberta, from an undisclosed company for approximately C$3.55 million in cash.

The acquired assets comprise 172,000 barrels of oil equivalent of proved reserves and 349,000 barrels of oil equivalent of proved-plus-probable reserves. Production is approximately 90 barrels of oil equivalent per day (80% oil). Other assets include a 100% interest in strategic infrastructure, a processing plant and related gathering lines.

This acquisition is expected to increase King's production 55%.

The acquisition will be financed through increased lines of bank credit.

Long View Resources Corp., Calgary, (Toronto Venture: LRC) has closed the acquisition of Wedona Energy Inc. and Wedona Energy II Inc. for 8.9 million shares of Long View at a price of C$0.50 each and cash consideration of C$2.1 million, giving the deal a total value of C$6.6 million.

Wedona and Wedona II are Regina, Saskatchewan-based E&P companies with 100% of production coming from Saskatchewan. Sayer Securities Ltd. was advisor to the companies.

The acquisition increases Long View's proved-plus-probable reserves to 897,100 barrels of oil equivalent and production to more than 200 barrels of oil equivalent per day. The purchase also increases Long View's net undeveloped acreage 143% from 3,883 acres to 9,426.

Madison Energy Corp., Calgary, (Toronto Venture: MDC) has sold 30% of its Garrington, Alberta, undrilled land-holding for C$60,000 and a 2.5% gross overriding royalty to an undisclosed party.

Peerless Energy Inc., Calgary, (Toronto Venture: PRY) has closed the acquisition of an arm's-length, private Saskatchewan oil and gas company whose assets are in Peerless' core area of southeast Saskatchewan.

With the closing, Peerless now has more than 35 net development and low-risk exploitation drilling locations in its southeast Saskatchewan inventory.

Prairie Schooner Petroleum Ltd., Calgary, (Toronto: PSL) has acquired a private company that owns producing properties in east-central Alberta for C$26.5 million, including C$15.8 million in cash and 700,000 shares.

Prairie Schooner gains more than 400 drilling locations, increases its production to 6,300 barrels of oil equivalent per day, and increases its proven and probable reserves to more than 20 million barrels of oil equivalent.

The assets produce approximately 550 barrels of oil equivalent per day (95% gas). Proved and probable reserves are approximately 2.5 million barrels of oil equivalent, giving the transaction a cost of C$10.60 per proved and probable barrel equivalent, according to Prairie Schooner.

Prairie Schooner financed the cash portion of the acquisition with its
C$80-million bank facility.

Richards Oil & Gas Ltd., Calgary, (Toronto Venture: RIX) has closed the acquisition of 4,640 gross acres (1,646 net) at Thorsby, central Alberta, from privately held Mazzaredo Resources Ltd., for C$310,000, consisting of C$250,000 in cash and C$60,000 in common shares.

The acquired interests are for oil and gas rights to the base of the Belly River formation and a 30% interest in a pipeline on the property.

In a separate transaction, Richards plans to acquire approximately 12,320 gross acres in the Lacombe area, central Alberta, from a private company for C$1.6 million in cash. The deal is to close this month.

The assets consist of 4,520 net acres of combined Crown and freehold shallow rights and 2,013 net acres of deeper rights with average working interests between 28% and 35%.

Current gas production from the Lacombe property is 120,000 cubic feet of gas per day.

Southpoint Resources Ltd., Calgary, (Toronto Venture: SPR) and P3 Energy Ltd. have combined, making P3 a subsidiary of Southpoint, for one Southpoint share per P3 share held, for a total of 1.1 million shares of Southpoint.

Southpoint has changed its name to E4 Energy Inc. (Toronto Venture: EFE).

Southpoint produced approximately 630 barrels of oil equivalent per day. The company had debt of approximately C$7.5 million and has expanded its credit facilities to C$10 million. Its portfolio of opportunities included more than 12 drilling locations and more than 10 recompletions in British Columbia and Alberta.

E4 will now produce more than 800 barrels of oil equivalent per day, while its proved-plus-probable reserves now total more than 2.1 million barrels of oil equivalent.

Sprott Securities Inc. was financial advisor to Southpoint.

Total E&P Canada Ltd. has raised its offer for Deer Creek Energy Ltd., Calgary, (Toronto: DCE) to C$31 per share for a total deal value of C$1.6 billion.

The Deer Creek board has unanimously approved Total's amended offer. Goldman, Sachs & Co. and Peters & Co. Ltd. are financial advisors for Deer Creek.

Total increased its original bid of C$25 per share after a superior bid was received by Deer Creek from an undisclosed party.

Deer Creek operates in the Athabasca oil sands, Alberta, and holds an 84% operated interest in the Joslyn project, which is to produce more than 200,000 barrels of bitumen per day. The reserve life is more than 30 years.

WaveForm Energy Ltd., Calgary, (Toronto Venture: WE) has acquired an additional 10.38 gross sections of land in its core area of southeast Saskatchewan for a total of approximately C$625,000.

This increases WaveForm's land-holdings to approximately 39,000 gross acres.

The company has also acquired 4,240 additional gross acres in its core drilling island in southeast Saskatchewan. The land provides up to 53 horizontal drilling locations in the Midale Evaporite, the Upper Bakken Shale and the Lower Bakken Shale. WaveForm has a 65% working interest in the land-holding.

Welton Energy Corp., Calgary, (Toronto: WLT) has acquired privately held Era Oil & Gas Corp. for C$10.5 million.

The acquisition included a 25% nonoperated interest in the Bailey heavy-oil pool in west-central Saskatchewan, having six wells with gross production of more than 150 barrels of oil equivalent per day.

Reserves include 542,000 barrels equivalent, proved, and 650,000 of proved plus probable.

Welton has also acquired approximately 2,300 net acres of undeveloped land.

Yangarra Resources Inc., Calgary, (Toronto Venture: AYX) and TriOil Ltd. (Toronto Venture: TRY) plan to merge, forming Yangarra Resources Ltd.

TriOil shareholders will receive one common share of the new company per TriOil share, while Yangarra shareholders will receive 0.95 share per Yangarra share.

The combined company will have 750 barrels of oil equivalent per day of net production with an additional 100 barrels equivalent per day of net production behind pipe. The company will have proven reserves of 1.6 million barrels equivalent and probable reserves of 1.3 million equivalent.

Its working capital deficiency, including bank debt, will be C$7.7 million.

Raymond James Ltd. advised Yangarra, while Woodstone Capital Inc. advised TriOil.