Devlan Exploration Acquires Acreage in Alberta
Devlan Exploration has entered into an agreement to acquire certain oil and gas holdings located in north central Alberta. The property produces net 256 boe/d (6:1) consisting of 182 bbl/d of high quality light oil and 445 mcf/d of sweet gas and will become another new core area for the Company.
The acquisition is within an established field with existing infrastructure and 21 producing wells. This high working interest property covers 18,560 (net 15,515) acres in two contiguous blocks including 13,120 (net 11,560) undeveloped acres with a number of identified drilling opportunities.
The majority of the property is operated and is characterized by long life reserves of greater than 10 years. The field contains over 457,000 barrels and 784 MMcf of proven reserves based on a third party engineering evaluation completed as of January 1, 2003. The agreement has a December 1, 2002 effective date and has already proved to be rewarding. Increased cash flow for the intervening period due to high commodity prices has further strengthened the Company's financial position and will allow Devlan to continue its aggressive expansion plans. Additionally, there are a number of other operational synergies that will further enhance the property upon closing.
The transaction is expected to close in mid-March, once due diligence is concluded. Devlan is in not disclosing the price at this time for competitive reasons, as it is actively pursuing additional property acquisitions in the area.