Calgary-based Rider Resources Ltd. said Tuesday it will spend C$208 million (US$179.7 million) to acquire some natural gas assets in west-central Alberta, where it concentrates its exploration efforts. Two gas processing facilities in Wapiti South are included in the purchase agreement, which was completed with an undisclosed seller.
The transaction, expected to close May 15, is expected to add about 44,000 net undeveloped acres to Rider's leasehold. The deal also will increase its net undeveloped land base by 40% to 152,000 net acres.
The acquired assets, located in the Wapiti South and Ferrier areas, currently produce 4,000 boe/d, but Rider said it will restrict output in the Ferrier area to maximize recovery, resulting in total production of about 3,6000 boe/d (17 MMcf/d of gas and 770 b/d of natural gas liquids). Proven reserves are estimated at 8.1 million boe, and proven plus probable reserves are estimated at 11.9 million boe. Operating costs are estimated at C$3.25/boe.
The Wapiti South area is adjacent to Rider's lands in the Karr and Washahigan areas of Alberta. In the Ferrier area, Rider is acquiring an additional 65% interest in a well in which it currently has 22% working interest. The well was drilled in 2004 into the Banff formation and to date has produced more than 10 Bcf.
Besides the acquisition, the junior independent said it is increasing its credit facilities to C$230 million (US$199 million). It also is issuing C$54.4 million (US$47 million) in new equity through the sale of 7.5 million common shares at C$7.25/share (US$6.26).
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