Santonia Energy Sells Clive Assets For $15 Million

Acquired Clive assets in Alberta including 470 BOE/d from 342 wells.

Santonia Energy Inc. (TO: STE) signed and closed an agreement for the sale of its assets in the Clive area in Alberta, Canada, for $15 million in cash on Sept. 17.

The transaction price included a gross overriding royalty of up to $10 million, subject to certain production level hurdles associated with the proposed Clive CO2 project. If certain conditions are met prior to Dec. 1, 2014 the purchaser has the option to acquire the gross overriding royalty for $7 million, subject to a possible extension which would result in an increased price for the gross overriding royalty.

The assets included production of 470 barrels of oil equivalent per day (BOE/d), second quarter netback of $33 per BOE, and second quarter operating income of $1.4 million from 342 wells.

Santonia's current credit facility is $100 million and the company does not anticipate any immediate changes to the credit facility. Current net debt, after giving effect to the Clive proceeds, is $15 million. The company anticipates with the balance of third quarter capital activity it will exit the quarter with net debt of $15 million to $20 million.

Santonia Energy Inc. is a crude oil and natural gas exploration, development and production company headquartered in Calgary.