The properties are being purchased effective April 1, 2005 through the acquisition of a privately owned arms-length partnership for $18.5 million in cash. The acquisition will be funded through a senior secured debt facility and is expected to close on or around April 24, 2006. The acquisition parameters are as follows:
i) Reserves - Company working interest gross reserves of 4.94 Bcf of established (proved plus probable) natural gas and 208,000 bbls of established natural gas liquids for a total of 1,031,500 established barrels of oil equivalent ("Boe"), based on an independent reserve report prepared by Ryder Scott Company dated effective March 1, 2006. Proven reserves account for approximately 92.5% of the total Boe's. - $14.35 per established Boe, net of undeveloped lands with an attributed value of $3.7 million, which is based on an internal estimate of recent land sales in the area - Reserve life index of 8.7 years ii) Production - Current net production averaging 325 Boe per day from 3 producing wells ($45,500 per producing Boe, net of value attributed to undeveloped lands) - One additional well to be tied-in during April 2006, with 25 Boe per day behind pipe iii) Net Operating Income Multiple - 3.6 times (based on the reserve report 2007 net operating cash flow with $62/Boe Canadian average pricing) iv) Other attributes - Undeveloped lands include 3 drilling locations in the producing zones of interest - High heat content gas which receives premium pricing - Multi-zone potential in both areas with producing offsets in the immediate vicinityRowley is located near Drumheller, Alberta, with year round access and existing infrastructure in place. WaveForm has working interests ranging from 70% to 100% and is the operator of these properties. Ferrier is located near Rocky Mountain House, Alberta, with year round access and existing infrastructure in place. WaveForm has a 37.5% non-operated working interest in the play. The drilling locations were planned jointly with the vendor and operators in the areas based on current geological modelling. The Company plans to use 3D seismic to optimize the drilling program and develop the multi-zone potential in the Ferrier and Rowley areas. Details of a work program will be issued in a forthcoming news release. WaveForm will use its proprietary Event Resolution Imaging Technology to identify additional drilling locations, and maximize potential in the areas.
The Ryder Scott reserve report will be available for public viewing on SEDAR once the transaction has been approved by the TSX Venture Exchange.
WaveForm is a junior oil and gas company focused on the acquisition, exploration and development of oil and natural gas in western Canada. The Company has a large land base in Tableland, Saskatchewan where it is producing light oil from the Midale Evaporite with future possibilities from the Bakken Formation, and other deeper zones.
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