Strategic O&G Finalizes Steen Acquisition
Strategic O&G has completed the previously announced (December 1, 2010) acquisition (the "Acquisition") of the shares of a private company, Steen River Oil & Gas Ltd ("Steen"), for approximately $10.5 million in cash and share consideration plus the assumption of $3.5 million in debt for an enterprise value of $14.0 million. The shareholders of Steen voted unanimously in favor of the Acquisition on December 22, 2010. The shares of Steen were acquired with the issuance of 4,416,545 million shares of Strategic at a deemed price of $0.90 and $6,349,162 in cash. Steen is a company with light oil production and lands situated entirely in northwest Alberta.
Summary of the Acquisition of Steen
Through the Acquisition, Strategic is acquiring high quality light oil assets, with a substantial land base and facilities focused in northwest Alberta. Steen's primary asset is an owned and operated light oil field producing from the Keg River zone. Steen is the primary operator in the area with over 110 sections of undeveloped land, oil and natural gas facilities and other infrastructure. This area has been under-exploited to date with minimal seismic or drilling activity.
Current production is approximately 250 boe/d with an additional 250 bbls/d of light oil ( 34 degree API) shut-in as a result of a pipeline break. Based on 500 boe/d of production, the Acquisition reflects a flowing barrel cost of $28,000/boe/d. The production is expected to be back on stream in the first quarter of 2011, at which time this Acquisition will add an incremental 500 boe/d of production to Strategic, of which greater than 2/3 is light oil.
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