Xstate Resources Acquires a 25% Interest in Blue Sky's Assets in Alberta and British Columbia
ASX-listed Xstate Resources Ltd. has entered into an agreement with privately-held Blue Sky Resources Ltd. to acquire a 25% working interest in an oil and gas producing asset located in Alberta and British Columbia, for a total consideration of approximately A$1.53 million in cash and stock. The asset includes non-operated working interests and royalty interests in 31 oil and gas fields, as well as associated infrastructure.
Under the terms of the deal, the total consideration is comprised of a cash consideration of A$1.03 million, plus an additional A$500,000 payable by way of issuance of 71,428,571 Xstate shares at a deemed price of A$0.007 per share, subject to shareholder approvals.
As of September 30th, 2020, the net proved (1P) reserves attributable to the assets are approximately 4.23 million barrels of oil equivalent (MMboe), of which 72% is gas, while the net proved plus probable (2P) reserves are approximately 8.03 MMboe. The current average daily production net to Xstate’s interest amounts to 1,500 barrels of oil equivalent per day (boe/d).
“We are pleased to add this suite of producing assets to our Canadian Producing Portfolio. We are building a company of scale in Canada and these assets will be integral to this process. The assets are highly complementary to our existing production, with all production operated by our close and trusted partner in Canada, Blue Sky Resources Limited,” commented David McArthur, Director of Xstate Resources.
Australia-based Xstate Resources is focused on onshore exploration and development activities in the United States, and currently holds interests in the Borba, Dempsey, and Alvares natural gas prospects in the Sacramento Basin in California.
Based in Calgary, Blue Sky Resources is owned and controlled by Ilyas Chaudhary. The company is currently focused on its operations in the Cuthbert, Luseland, and Hearts Hills areas of Saskatchewan and at its Utikuma Lake property in Alberta.
The transaction is subject to customary closing conditions, including the receipt of approvals, 45 days of due diligence by Xstate Resources, and the completion of the acquisition of the assets by Blue Sky Resources. The transaction is expected to close in Q3-2021.