The board of directors at DeeThree Exploration Ltd. (TO: DTX) approved the reorganization of the company into two separate companies, DeeThree said April 7.

Boulder Energy Ltd. will work in DeeThree’s Belly River development in the Pembina-Brazeau area of Alberta.

Granite Oil Corp. will work in DeeThree’s Bakken EOR project in southern Alberta.

The companies will have separate management and technical teams and boards of directors, DeeThree said.

DeeThree shareholders will receive 0.5 shares of Boulder, and 0.33 shares of Granite, for each DeeThree share.

The Belly River prospect was acquired in 2011. The area now produces more than 8,000 barrels of oil equivalent per day (boe/d) with 33 MMboe of reserves. DeeThree controls more than 98,000 contiguous net acres. Its pipeline structure and battery were expanded to handle 12,000 bbl/d.

Belly River has multiple development horizons and produces 44 degree API oil and liquids-rich natural gas. To date, the company has identified more than 400 horizontal drilling locations and worked successfully in seven distinct zones, DeeThree added.

Boulder is expected to be a pure-play Pembina-Brazeau Belly River producer.

Since 2012, DeeThree has drilled 49 wells in an oil pool containing more than 80 sections. Significant pipeline infrastructure has also been built, and production is currently 3,900 bbl/d.

The area’s oil pool is suited for gas injection secondary recovery, the company said. A gas reinjection EOR pilot was done within 18 months of the pool’s discovery. The pool’s core area is declining now at 20%, lower than previously, the company said, noting a positive effect on EURs.

Granite will hedge 2,000 bbl/d for the 2015 calendar year.

Cormark Securities Inc., Macquarie Capital Markets Canada Ltd. and Raymond James Ltd. are DeeThree’s financial advisers. Davis LLP is its legal adviser.