Crew Energy Inc. has exercised the option to purchase the balance of Terra Energy Corp.’s Montney assets in northeast British Columbia for $36 million.
On February 28, 2013, Alberta, Canada-based Crew continued its expansion of unconventional Montney holdings with the closing of the second tranche of its multi-option acquisition in the greater Septimus/Groundbirch area with Terra Energy. The transaction added an additional 59 net sections of land for $20 million and granted Crew one additional option for an additional 81 net sections of Montney lands. To aid in funding the acquisition, Crew increased its bank facility to $430 million.
Exercising its option, Crew will acquire the balance of Terra’s unconventional Montney assets in northeast British Columbia by way of a combination of cash or common shares of Crew, with a minimum cash component of $10 million.
Crew reported in its 1Q13 financial report that a recent evaluation (Total Petroleum Initially in Place) confirmed hydrocarbon accumulation of 76 tcfe made up of 33.7 tcf of natural gas and seven billion barrels of light oil from the company’s then 292 Montney sections.
Terra intends to utilize the net proceeds from the most recent sale to further reduce its indebtedness. Terra's production and cash flow will remain unchanged as a result of this sale as the assets included in this transaction have no current production attributed to them.