An Alberta-based drilling company is spending $207.29 million to acquire assets in the Montney Shale in northeast British Columbia, Kallanish Energy reports.
Painted Pony Petroleum said last week that it has acquired 69,143 net acres from UGR Blair Creek for $229 million in shares and the assumption of about $47 million in debt.
The Calgry-based company is also seeking $100 million in equity financing and will use some of those funds for additional Montney drilling on the acquired lands and its nearby property.
UGR’s assets “fit like a glove with our existing asset base,” said Painted Pony president and CEO Pat Ward, in a statement.
The purchase increases Painted Pony’s holdings by 52%, to 201,000 net acres.
Current production on the newly acquired property is in excess of 51 million cubic feet-equivalent per day (Mcfe/d), the company said.
The purchase is projected to boost Painted Pony’s 2017 average daily production by 12%, to about 290 MMcfe/d. Year-end 2017 production is projected to be about 447 MMcfe/d, the company said.
The deal also provides Painted Pony with additional firm transportation on the Enbridge T-North pipeline system and provides 155 MMcf/d of firm gas processing capacity, most of which is not utilized by UGR.
The deal is expected to close in May.