Cano Petroleum Acquires Oklahoma Oil & Gas Company
|Tuesday, July 06, 2004
Cano Petroleum has acquired Ladder Energy Company of Edmond, Oklahoma.
The cost of the acquisition is approximately $2,200,000. Ladder's assets include 51 producing oil and gas wells located in the Rich Valley field comprising over 4,500 acres. Current net production is about 110 barrels of oil equivalent per day (boe/d), and proven reserves are estimated at 682,000 barrels of oil equivalent, 30% oil and 70% gas, as of June 29, 2004 making the cost of acquisition $3.23 per proven boe. Current pretax cash flow from the Ladder property is approximately $80,000 per month.
Cano expects to increase production on Ladder's existing wells through recompletions and remedial work with an anticipated eventual production of 200 boe/d. There is also potential for drilling up to 16 additional wells and deeper drilling.
The acquisition closed on June 30, 2004 with an effective date of May 1, 2004.
"The Ladder acquisition provides Cano with the type of opportunity in which our management team has historically excelled," said Jeff Johnson, CEO of Cano Petroleum, Inc. "As our first acquisition, Ladder highlights our corporate strategy of pursuing attractively valued assets with good upside potential."