Solara Exploration Ltd. has completed an acquisition of various natural gas producing properties located in northeastern Alberta. The properties are currently producing approximately 440 Mcf/d or 70 barrels of oil equivalent per day (BOE/d). In addition, Solara has acquired interests in 16,640 net undeveloped acres (6,656 net hectares) in close proximity to the producing wells and lands.
The proved and probable oil and gas reserves of the producing and non-producing assets were evaluated at May 31, 2007 by GLJ Petroleum Consultants and were assigned a value of $3.19 million utilizing a discount rate of 10% and adjusted for the new Alberta royalty program at November 1, 2007. The GLJ Report estimates total proved plus probable natural gas reserves of 1,596 MMcf or 266 MBOE. The transaction, which closed on January 25, 2008, had a purchase price of $1.05 million and an effective date of January 1, 2008. The purchase price translates into $15,000 per flowing barrel of oil equivalent. The Company used existing lines of credit to pay for the acquisition. The board of directors of Solara is very pleased with the acquisition which is accretive to the shareholders and is expected to provide additional drilling and optimization opportunities for the Company.
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