ProspEx Sells Brazeau Mineral Rights
ProspEx Resources Ltd. has entered into an agreement with a private company to sell certain undeveloped mineral rights in the Brazeau area in West Central Alberta for $8.1 million in cash proceeds. Closing is expected to occur in late December, 2010. The mineral rights to be sold consist of 6,240 gross acres (4,954 net acres) of rights to shallower zones in Brazeau, including the Cardium rights.
ProspEx had no near term plans to drill the Cardium or other shallow formations included in the disposition. The rights to the deeper formations, including the rights to the Notikewin formation which the Company has recently targeted with horizontal drilling, are not included in the sale. There are no wells, production or reserves associated with the transaction.
ProspEx's strategy is currently focused on the development of liquids rich natural gas utilizing horizontal drilling with multi-stage fracturing technology. The disposition further focuses the Company's asset base on lands with this potential, and adds additional financial flexibility to fund ProspEx's 2011 capital program. Assuming closing of the transaction prior to year end, the Company expects net debt at December 31, 2010 to be in the range of $21 to $23 million, depending on the timing of capital expenditures over the remainder of 2010. The Company expects that the transaction will have no impact on its currently approved credit facility of $40 million.
ProspEx Resources Ltd. is a Calgary based junior oil and gas company focused the development of liquids rich natural gas in the Western Canadian Sedimentary Basin, utilizing horizontal drilling with multi-stage fracturing technology.