Calgary-based Elk Point Resources Inc. increased its core area of operations this week, agreeing to pay C$24.8 million to purchase some natural gas and light crude oil assets in the Pembina, Easyford and Bigoray areas of Alberta. Current net production from the properties is approximately 2.9 MMcf/d, 385 bbl/d of light crude oil and 55 bbl/d of natural gas liquids — 730 boe/d total.

With the acquisitions, which are expected to close by the end of April, Elk Point also increased its capital budget for 2001 to C$60 million. The company estimates established reserves in the new properties at 3.24 MMboe and proven reserves at 2.58 MMboe.

The acquisitions increase Elk Point’s working interests in the Bigoray and Lobstick natural gas units, adding two operated oil units and an operated Nisku oil pool. The operating costs of the producing assets are currently C$5.20/boe, with an overall decline rate of 14%.

The Bigoray/Lobstick portion of the acquisition increases Elk Point’s working interests in the Bigoray Unit #1, the Lobstick Gas Unit and several non-unit wells and lands. The company also is acquiring operatorship and working interests of 48% and 50% respectively in the Bigoray Nisku K Unit and the Bigoray Nisku H Pool. It also acquired operatorship and working interests in two oil batteries, a 60% working interest in a compressor station and another 15.9% working interest in the non-operated Lobstick gas plant.

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