Artek Exploration Buys Core Property At Fireweed

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
15MM
Description

To purchase certain natural gas assets located at Fireweed.

Artek Exploration Ltd. (TO: RTK) entered into an agreement with a Canadian intermediate oil and gas company to acquire certain natural gas assets located at Fireweed for C $15.1 million, the company announced on Aug. 1.

The properties are adjacent to the company's core operating and producing area at Inga in northeastern British Columbia. The acquisition has an effective date of April 1 and is subject to standard industry closing conditions. Closing is expected to occur on or around Aug. 9.

Artek is acquiring a 50% working interest and its partner at Inga, Kelt Exploration Ltd. is also acquiring a 50% working interest in the assets which include gross production of 1,200 barrels of oil equivalent per day (BOE/d). Artek will be the operator of the property. Financial and operating information provided herein reflect only Artek's working interest relating to the Fireweed assets to be acquired.

Key attributes of Artek's interest in the assets to be acquired include:

  • Current net production estimated to be 600 BOE/d - 79% natural gas and 21% NGLs;
  • Net operating income for the first six months of 2013 was $1.9 million;
  • Petroleum and natural gas reserves to be acquired were evaluated by an independent third party effective Dec. 31, 2012. Proved developed producing reserves were 1.23 million BOE with no future development costs (FDC);
  • An operated compression and dehydration facility with 16 million cubic feet per day (MMcf/d) of capacity and 25 kilometers of pipeline that significantly expands Artek's infrastructure in the area; and
  • The Fireweed assets are a complementary fit with a contiguous land position adjacent to Artek's Inga exploration and development core area, and adjacent to its undeveloped Fireweed area, including 11,227 net acres (15.8 net sections) of land (6,299 net acres with Doig mineral rights and 7,097 net acres with Montney mineral rights).

The Fireweed acquisition adds to Artek's inventory of horizontal drilling locations targeting the Doig formation and provides the company with significant expansion of its land base for potential exploration in the Montney formation. After giving effect to the acquisition, in its Inga/Fireweed core area, Artek will own 73,019 gross (41,655 net) acres or 107 gross (61 net) sections of land with Doig rights and 81,548 gross (48,258 net) acres or 120 gross (71 net) sections of land with Montney rights. The acquisition significantly expands both its land and infrastructure footprint and the company is excited about the potential operational synergies to both its existing core Inga producing area and its undeveloped land position in the Fireweed area to the north.

Artek Exploration Ltd. is an independent energy company engaged in the exploration, acquisition, development, and production of oil and natural gas reserves in Western Canada. The company is headquartered in Calgary.