Strategic Buys Cameron Hills, Bistcho Assets
Purchased the Cameron Hills and Bistcho assets in northern Alberta and the Northwest Territories.
Strategic Oil & Gas Ltd. (Toronto Venture: SOG) has purchased the Cameron Hills and Bistcho assets of Paramount Resources Ltd. for $9 million in cash.
The assets, which are adjacent to Strategic’s Steen River core area, will add about 500 barrels of oil equivalent (BOE) per day of production and 1.1 million BOE of reserves to Strategic. About 40% of the production is light oil.
Strategic said the acquired assets’ associated plant and pipeline network are of significant strategic importance for accelerating the future growth from Steen River. The purchase represents a strategic expansion of the company's focus area and provides Strategic with abundant well control, seismic coverage, and significant light oil potential.
"This acquisition provides the next stepping stone for adding value to Strategic while adding high quality assets with unrealized upside and repeatable drilling potential, in an area adjacent to our significant northern Alberta land position," said Gurpreet Sawhney, president and chief executive of Strategic. "Infrastructure, and control of infrastructure, are key to successful operations and this acquisition gives Strategic this advantage."
The Bistcho assets have significant well control with opportunities for multi-zone subsurface upside. At Bistcho, there is a direct pipeline connection to the Rainbow Pipeline that will enable Strategic to reduce trucking charges while maintaining multiple accesses to market for its crude products. Cameron Hills is a high quality asset with significant oil and gas development potential.
Strategic said the transaction will enable it to increase efficiencies, eliminate certain infrastructure capital costs and give it access to a pipeline that will enable it to connect Steen River oil production to the Rainbow Oil pipeline and eliminate oil trucking charges.
Strategic will assume operatorship and hold a 59% interest in the Bistcho gas plant and oil facility. In addition, it will operate the Cameron Hills oil facility and hold an 88% interest in it. The land base of the purchase includes more than 200 net sections with light oil prospectivity in the Slave Point, Sulphur Point and Keg River.
The purchase price represents about $17,875 per producing BOE and $8.13 per BOE of proven plus probable reserves.
Strategic believes the acquisition gives it multiple prospects for expansion, control of infrastructure immediately offset from its Strategic Steen River Assets, and one of the largest land positions in northern Alberta and the Northwest Territories of any independent producer in the area.
Strategic is an independent oil and producer based in Calgary.