Nordic Sells Stake in Alberta Heavy Oil Assets
Nordic Oil and Gas has entered into a strategic alliance with Western Plains Petroleum, whereby Western Plains will acquire a 50% interest in Nordic's land holdings and heavy oil wells in Lloydminster, Alberta. In consideration of this agreement, Nordic will receive an aggregate of $2,500,000 from Western Plains, consisting of $2.1 million in cash and $400,000 of Class A Common Shares of Western Plain. Nordic will retain the other 50% interest in the Company's Lloydminster land holdings and heavy oil wells.
Western Plains is a Lloydminster, Alberta, based junior heavy oil producer with interests located in the Lloydminster area in both Saskatchewan and Alberta. They are a leading operator of heavy oil wells in Lloydminster, and in conjunction with this deal they will become the new operators on all of the Nordic Wells located in Lloydminster.
"This is a deal of significant magnitude and importance for Nordic Oil and Gas Ltd.," Mr. Benson stated. "Firstly, it provides us with a much needed influx of capital which will allow us to move forward on numerous fronts. Secondly, we could not be more pleased to be associated and working with Western Plains, an experienced, competent and successful operator in the Lloydminster region.
"I am confident that with their skill and expertise, we will see the value of our property strengthen considerably in the coming months, leading to solid cash flow and many new growth opportunities for us in Lloydminster," he added. "Furthermore, I see this strategic alliance as a stepping stone to other deals with Western Plains down the road."
It is anticipated that Western Plains will commence bringing on the five new wells that Nordic drilled at the end of 2009 as soon as possible, resulting in almost immediate production. In addition, Western Plains will also turn its attention to some of the maintenance issues facing Nordic's other nine wells, meaning that all 14 wells are expected to be on full production in short order.
"We are indeed excited at the opportunity of working with Nordic Oil and Gas Ltd in Lloydminster," said David Forrest, President and Chief Executive Officer of Western Plains Petroleum Ltd. "Our strength has always been that of an operator and together, with Nordic's strong land holdings in the area, I'm sure both companies will significantly benefit from this agreement."
Western Plains' President & CEO Dave Forrest has over 15 years experience in developing heavy oil plays located around Lloydminster and Maidstone, Saskatchewan. Mr. Forrest founded IC Energy Ltd., a private oil and gas exploration and production company, building production to approximately 750 BOEs(1) per day, with P&NG leases aggregating 5,440 acres, before selling to Arsenal Energy Inc. on March 31, 2005, for a purchase price of $10 million.
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- Nordic Enters ELF Agreement (Oct 29)