Corporate M&A

Calima Energy Acquires Montney-focused Blackspur Oil

By Isha Makkar
February 26, 2021
2 minutes read
Blackspur Oil Alberta Assets

ASX-listed Calima Energy Ltd. has entered into a binding agreement to acquire 100% of the issued share capital of privately-held Blackspur Oil Corp. in a corporate transaction valued at C$60 million, including the assumption of debt. Calima has received support agreements from 70% of Blackspur’s shareholders.

Under the terms of the agreement, Calima will acquire Blackspur in exchange for total cash and stock consideration of C$17 million, comprised of an initial consideration of C$12.1 million payable via issuance of around 1.7 billion shares of Calima common stock (valued at C$0.007 per share), plus a cash consideration of up to C$4.9 million. Adjusting for Blackspur’s reported current bank debt of C$43 million, the total transaction value is C$60 million on an enterprise value basis. A further contingent payment of up to C$4.5 million in Calima Energy shares shall be payable based on Blackspur’s net debt position upon closing.

Calgary-based Blackspur Oil is engaged in the development of conventional assets in the shallow Mannville oil play in Alberta, with a focus on two core production areas, Thorsby and Brooks.

The Brooks assets include approximately 83 net sections of core producing properties, along with associated infrastructure. The interests include eight wells drilled to date and 147 identified net locations. Primarily targeting the Sunburst and Glauconitic formations, Blackspur’s existing infrastructure can process up to 7,000 barrels of oil per day (bbl/d). Average daily production during Q4-2020 from the Brooks properties was approximately 1,860 boe/d.

The company’s Thorsby properties include approximately 108 net sections and include 11 wells drilled to date. These assets primarily target the Sparky and Nisku formations, and the associated infrastructure can process up to 3,000 bbl/d of oil. Average daily production during Q4-2020 from the Thorsby properties was approximately 740 boe/d.

Perth-based Calima Energy currently holds a portfolio of upstream assets that includes interests in the Montney Formation in Canada, and offshore exploration interests in the Sahrawi Arab Democratic Republic (SADR) and Namibia.

“The merger with Blackspur creates an emerging oil and gas producer with production and current operating cash flow of ~C$1.8million/month in addition to a substantial reserve and resource base for future growth,” said Glenn Whiddon, Chairman of Calima Energy.

“The Montney acreage offers material upside exposure to rising gas prices from the growth of the LNG industry in Canada and North American demand. We look forward to combining with the Blackspur team and growing the company for all shareholders going forward,” he added

The transaction, which is subject to shareholder and court approvals, is expected to close in April.

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