Sure Energy Inc (TSX: SHR) said it has agreed to acquire a private oil and gas company for a total of C$8.8 million. The name of the company was not disclosed.
Under the terms of the agreement Sure Energy will pay C$0.26 in cash and will issue 0.4 of a Sure common share for each of the 23,036,889 outstanding shares of the private company.
Sure Energy and the company have agreed to pay each other a break fee in certain circumstances. Sure Energy also has the right to match any superior unsolicited offers that are received by the company prior to closing.
The private company's assets are high quality oil and gas properties located in the north central, central and Redwater areas of Alberta. The Redwater assets are complementary to Sure Energy's existing assets in the area and significantly increase Sure Energy's exposure to an emerging conventional light oil resource play in the area.
The private company has three producing horizontal wells in the play and their offsetting lands have potential for up to 15 low risk development step-out wells. The deal also exposes Sure Energy to a light oil play in the Pembina area and incorporates several long life, low decline gas wells in the Deep Basin, Peace River Arch and W5M areas of Alberta.
The acquisition target currently produces 200 barrels of oil equivalent per day, of which 50 percent is oil, and the transaction will increase production of the enlarged group to 850 boe/day.www.proactiveinvestors.com
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