Terra Energy Corp. announced that Crew Energy Inc. has exercised the option to purchase the balance of Terra's Montney assets in northeast British Columbia for a purchase price of $36 million.
On February 28, 2013, the Company granted Crew an option to acquire the balance of its unconventional Montney assets located in northeast British Columbia for a purchase price of $36 million, subject to typical industry adjustments, by way of a combination of cash or common shares of Crew, with a minimum cash component of $10 million. The option contained restrictions on assignment and had to be exercised by Crew on or before June 3, 2013, with a closing to occur on or before July 9, 2013.
On June 3, 2013, Crew elected to exercise its option to purchase the balance of Terra's Montney assets. The companies have also entered into a fully executed purchase and sale agreement in respect of this sale. Crew will have until 10 days prior to closing in order to notify Terra of the combination of cash and shares comprising the purchase price, providing that the purchase price includes a minimum cash component of $10 million.
Terra intends to utilize the net proceeds from this sale to further reduce its indebtedness. Terra's production and cash flow will remain unchanged as a result of this sale as the assets included in this transaction have no current production attributed to them.
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