Asset A&D

Sacgasco to Farm in to Blue Sky's Southern Alberta Assets

By Shivangi Jain
January 29, 2021
2 minutes read
Onshore Oil Rig

ASX-listed Sacgasco Ltd. has entered into a binding term sheet with privately-held Blue Sky Resources Ltd. to acquire a 20% working interest in certain reactivated oil fields in southern Alberta, for a total consideraiton of approximately A$650,000 in cash and stock.

Under the terms of the agreement, the consideration will comprise a cash payment of A$510,000 and the issuance of approximately 1.97 million Sacgasco shares valued at A$140,000.

The assets include certain oil and natural gas fields located between Edmonton and the U.S. border, with principal crude oil properties located in the Little Bow, Taber and Badger areas. The leases covering the fields are crown (Government-awarded) leases and are mostly held by production. A majority of the wells being acquired have been producing for many years, and the producing reservoirs are predominantly conventional sandstone reservoirs.

Proven (1P) reserves associated with the acquired acreage (as of December 31st, 2019) are estimated at 733.1 thousand barrels of oil equivalent (Mboe) net to interest being acquired, with current net average daily production of approximately 100 barrels of oil equivalent per day (boe/d), of which 84% is oil.

“Sacgasco has had a strategy of seeking opportunities in underexplored and undervalued assets supported by invaluable infrastructure and facilities and this second transaction in Alberta with our trusted and proven operator Blue Sky is a prime example of such assets,” stated Gary Jeffery, Managing Director of Sacgasco.

“With the recent strength in the oil prices, and every indication that this will continue, Sacgasco is primed to benefit from this and our operator’s ability to significantly enhance current production levels. These assets will strengthen Sacgasco’s growing production and development portfolio in North America and provide Sacgasco with diversity and resilience that is complementary to the world class opportunities for natural gas in the Sacramento Basin,” he added.

Subiaco, Western Australia-based Sacgasco is focused on onshore exploration and development activities in the United States and Canada, and currently holds interests in the Dempsey and Alvares natural gas prospects in the Sacramento Basin in California, as well as certain oil producing assets in the Red Earth area of northern Alberta.

Calgary-based Blue Sky is currently focused on operations in the Cuthbert, Luseland, and Hearts Hills areas of Saskatchewan, and its Utikuma Lake property in Alberta.

The transaction is subject to the receipt of approvals and completion of the acquisition of the assets by Blue Sky, and is expected to close by March 10th, 2021.

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