2009-08-05-2009-08-01

To buy private co. with assets in west-central AB, 6.7 MMBOE 2P, 1,650 BOE/d.

Crocotta Energy Inc., Calgary, (Toronto: CTA) plans to acquire an undisclosed private company for approximately C$80 million. Crocotta will issue approximately 19.9 million shares at C$1.40 per share to the private company's shareholders and assume approximately C$52 million in debt. The average working interest on the properties is 75% with more than 83% of the production operated. The assets include more than 44,000 net undeveloped acres in Crocotta's Niton core area in west-central Alberta. Production is approximately 1,650 barrels of oil and gas equivalent per day (60% gas). Proved and probably reserves are 6.7 million barrels equivalent. The assets also include exposure to the Montney resource play in northeastern British Columbia. Crocotta will fund the acquisition through bank lines and a bridge financing provided by Brookfield Bridge Lending Fund Inc. Crocotta has identified and initiated a sales process on nonstrategic properties in west-central and southern Alberta totaling 1,000 barrels equivalent per day. Crocotta will sell a minimum of 500 barrels equivalent per day prior to year-end to reduce debt and allow future cash flow to be used for capital programs in core areas. The deal is expected to close by Aug. 13.