Canadian Superior Completes Acquisition of Drumheller Assets
Canadian Superior Energy has successfully completed the acquisition of El Paso Corporation's Drumheller, Alberta area oil and gas assets, production facilities, gas plants and undeveloped lands located in Central Alberta.
The El Paso transaction closed on schedule yesterday with an effective date of October 1, 2002 and was completed for approximately Cdn. $53.3 million, net of purchase price adjustments.
The Drumheller Area production purchase includes current production of approximately 2,600 boe/d of company operated sweet gas and light crude oil production and high working interests in 170,000 gross acres of land (106,693 net acres). The transaction includes extensive seismic data and key infrastructure assets consisting of interests in three gas plants, three oil batteries, 20 production facilities and 130 kilometers of company-operated pipelines. Production is comprised of 75% natural gas and 25% light sweet crude. The properties are being acquired for approximately $53.3 million, net of purchase price adjustments, which equates to $20,576 per flowing boe/d using a 6:1 conversion ratio. Approximately 40 high working interest drilling locations have been identified for drilling during 2003 on the undeveloped lands with an estimated risked potential to add approximately 1,945 boe/d of net production to Canadian Superior.
The acquisition compliments Canadian Superior's existing portfolio of high impact prospects in Western Canada by adding assets with year round access. Canadian Superior has identified considerable upside on the acquired lands. Speaking in Calgary today, Canadian Superior's President, Greg Noval said, "The transaction adds high quality production, reserves, extensive infrastructure and undeveloped lands easily accessible for development on a year-round basis. El Paso has successfully targeted primarily the shallow opportunities on its lands. In addition to continuing to develop low risk shallow opportunities, we believe that deeper horizons can be targeted to add reserves and production on a cost effective basis.
The acquisition adds low risk stable production and development prospects to compliment Canadian Superior's existing high impact prospects, including our East Ladyfern project where a multi-well drilling program is underway and our exciting offshore Nova Scotia projects."