Highwood Oil Divests Red Earth Area Legacy Assets in Alberta
Calgary-based E&P independent Highwood Oil Company Ltd. has entered into an agreement with an arm’s-length private oil & gas company to divest the majority of its Red Earth area assets in Alberta, for a cash consideration of CA$8 million plus additional equity consideration of 10% of the purchaser’s outstanding common shares. Under the terms of the agreement, Highwood Oil is entitled to reserve against the Red Earth assets an overriding royalty of 5%. Current production from the assets is approximately 950 barrels of oil per day. Following the completion of the transaction, the company intends to focus its efforts on its ongoing drilling program targeting the Clearwater Fairway located between the Jarvie and Nipisi areas of Alberta. The divestiture is subject to regulatory approval and license transfers, and is expected close in April.