2010-01-14-2009-11-05

To acquire assets in Warburg area of Alberta, gaining 1,450 BOE/d, 6.1 MMBOE/d proved.

West Energy Ltd., Calgary, (Toronto: WTL) plans to buy properties in the Warburg area of Alberta from an undisclosed seller for C$147 million. West Energy reports C$27 million is allocated to infrastructure, resulting in a proved reserves acquisition price of C$19.70 per barrel of oil equivalent. The assets include 57,000 gross acres and extensive infrastructure, including 40 Cardium horizontal drilling locations with an average working interest of 80% and more than 100 recompletion opportunities in upper zones. Proved reserves total 6.1 million barrels of oil equivalent and have a reserve-life index of 11.5 years. Proved plus probable reserves are estimated at 7 million barrels of oil equivalent with an reserve-life index of 13.3 years. Current daily production from the assets totals 1,200 barrels of light oil per day and 1.5 million cubic feet of gas per day, for a combined 1,450 barrels of oil equivalent per day. The deal also includes an owned and operated oil battery, gas plant and extensive gathering system. According to West Energy, the acquisition will result in a major diversification of the company's reserves. The assets are also in close proximity to its core assets at Crossfire. The deal is expected to close by Dec. 15. CIBC World Markets is advisor to West Energy. The acquisition is being financed with cash on hand and credit facilities. In conjunction with the acquisition, West Energy has entered into discussions with its banker to create a C$50-million syndicated credit facility that will replace its existing general operating credit facilities.