Husky Adds More Than 65MMcf/d with Foothills Property Acquisition
Husky has signed a purchase agreement to acquire natural gas properties in west central Alberta, which will significantly add to the Company's production and reserves and extend the optimum utilization of its Ram River Gas Plant.
The asset acquisition will provide Husky with more than 65 million cubic feet per day (mmcf/d) of natural gas production or 10.8 thousand barrels of oil equivalent per day (mmboe). In addition, the acquisition will contribute 37 mmboe of proven reserves and 11.7 mmboe probable reserves. Husky's reserves estimates are as of June 1, 2010.
"As part of our heightened focus on growing near-term production, Husky has initiated a strategy to accelerate near term production opportunities and to leverage our balance sheet capability in order to make acquisitions that fit with our business competence," said CEO Asim Ghosh. "This agreement represents an important step in executing that strategy."
The Ram River Gas Plant processes a significant portion of the production that is being acquired, and over a five-year period, further production from the acquired properties will be integrated into the plant.
"This is an important acquisition that adds to our natural gas production and reserves in an area where we have significant gas gathering and processing infrastructure," said Ghosh. "The terms of the deal provide an attractive rate of return at today's natural gas prices and offers Husky significant upside potential."
The agreement is subject to final closing and regulatory approvals, expected in fall of 2010.
The Ram River region in the foothills of central Alberta is a core gas producing area for Husky. The Company currently produces 50 mmcf/d. The acquisition adds 160,000 acres of land to the Company's holdings, including 122,000 undeveloped acres, doubling Husky's current land holdings in the region.
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