FORT ST. JOHN, B.C. – Tourmaline has acquired two oil and gas companies operating in Northeast B.C. and closed another transaction announced in November.
Tourmaline will purchase Chinook Energy Inc and Polar Star Candian Oil and Gas Inc. The two transactions are worth $33.4 million.
Tourmaline will acquire all of the issued and outstanding common shares of Chinook for a cash consideration of $0.0675 per share. The total value of the transaction is $24.4 million, including assumed debt. The deal should close this April. The Chinook Northeast B.C. assets include approximately 3,500 boepd of production, 35.6 mmboe of 2P reserves, 54,000 acres of Montney lands, a gas plant, a compressor station, and a 190 mmcfpd regional 12-inch pipeline.
Tourmaline also announced the purchase of Polar Star Canadian Oil and Gas Inc. on February 14, 2020, for total cash consideration of $9.0 million, plus working capital adjustments. The acquired B.C. assets include approximately 2,500 boepd of production, 2P reserves of 80.7 mmboe, 106,000 net acres of Montney lands, and a compressor station.
The company expects the new assets will generate $8 to $20 million in cash flow per year at the current gas rates. Minimal development of the assets is expected in the next two years, while Tourmaline assembles a regional facility plan as a critical aspect of the future development of these assets, including a Gundy scale deep-cut facility.
Last November’s purchase of Painted Pony included a 75% working interest in a 13 section block of acreage adjacent to the Tourmalines Gundy complex for $49 million. The company is planning to bring a new nine-well pad on production in Q3 2020 from the acquired lands, with an estimated initial production rate of 15,000 boepd (gross) (65 mmcfpd, 5,000 bpd liquids). Tourmaline plans to sell a GORR to Topaz Energy on the acquired lands, equivalent to the GORR on the existing Tourmaline Gundy acreage, for $22.5 million.
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