Aroway, Partner Conclude Acquisition Transaction
Aroway and its Joint Venture Partner have completed a transaction to acquire certain lands in its core area with a third party private oil and gas company. The particulars of the agreement are as follows:
- The Partnership will acquire 10 sections of land, typically, all rights, and
- The acquisition includes six (6) existing wellbores, typically drilled to the base of the Leduc, and
- The Partnership acquired the lands and wellbores in exchange for a variable gross overriding royalty ranging from 6% to 8%.
As a result of the agreement, the Partnership will begin a recompletion program on the 6 acquired well bores in addition to 2 other wellbores that have become available under the Company's initial partnership deal. At least 2 additional wellbore opportunities will follow later in the year. Consistent with the Partnership's strategy, all the wellbores are multi-zone prospects for oil, gas and gas liquids. Each of the wellbores are covered by 3D seismic, and are in close vicinity to tie-in to the Joint Venture Partners gathering and plant infrastructure. The Company anticipates releasing recompletion results once the well bores have consistently produced at stabilized economic volumes.
Aroway's 3rd well of the 2011 exploration program will be tested and completed in the coming days, as operations were delayed by wet weather.
Chris Cooper, President and CEO, commented, "We are confident that the recompletion program will deliver economic material production at a substantially low cost per flowing boe from the existing well bores acquired. Success with this program along with our 2011 drill program will further contribute to Aroway achieving its year-end target of 600 boe/day."