Galleon to Acquire Properties in Dawson & Peace River Arch
Galleon Energy has signed an agreement to purchase oil and gas properties located in the center of Galleon's core areas of Dawson and Calais in the Peace River Arch area of Alberta for $90.5 million. Closing is expected before the end of May 2005.
The purchase includes daily production of a minimum of 2,100 boe (60% light sweet oil, 40% natural gas); the remaining working interest in the existing Galleon operated gas plants and gathering systems in the Dawson area; 100% working interest in three additional gas plants; 85% working interest in and operatorship of a large oil battery; significant upside for low risk development drilling and recompletions; and approximately 147,000 net acres of undeveloped land.
This acquisition increases Galleon's exposure to premium light sweet oil development projects, improves exploration efficiency and is accretive on cash flow and production per share. It is a key part of Galleon's strategic plan to expand the exploration drilling program in the Peace River Arch area and to gain control of infrastructure in the area. Production from this area is characterized by high quality, multi-zone oil and gas reserves.
The acquisition will be initially financed through a combination of cash on hand, increased availability of bank credit facilities and potentially a bridge financing.
Post closing this transaction, Galleon estimates that daily production by
the end of June will be in excess of 7,000 boe (64% natural gas). The
acquisition increases Galleon's owned undeveloped land to over 327,000 net
acres. In total, Galleon has access through ownership and farm-in to over
636,000 gross acres of land in the Peace River Arch area.
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- Galleon Reports Horizontal Drilling Success with Montney Wells (Jul 23)