Striker Exploration Corp. ("Striker" or the "Company") (TSX VENTURE:SKX) is pleased to announce that it has entered into a purchase and sale agreement with an arm's length public oil and gas company for the acquisition of an asset in the Wilson Creek area for $3.875 million cash, before adjustments (the "Acquisition"). The Acquisition is expected to close on or about June 16, 2015 with an effective date of April 1, 2015.
The Acquisition is consistent with Striker's objectives of focusing on shallow light oil prospects, increasing its horizontal location inventory, and enhancing positions in Company operated core areas.
The Acquisition exposes Striker to a Belly River oil focused, extensive and highly prospective land base offsetting existing acreage. The Acquisition has considerable upside and expands the Company's Belly River drilling inventory within the context of current market conditions.
The key attributes of the Acquisition include:
- 38 gross (25 net) sections of land including 15 gross (14 net) freehold sections;
- 13 gross (9 net) development/delineation Belly River horizontal light oil locations of which 5 gross (5 net) are on freehold acreage; and
- Potential for an extensive increase to horizontal drilling location inventory with development success.
The Acquisition includes Belly River vertical wells producing or completed in both channel and basal Belly River sands. Management believes these wells provide invaluable data points in supporting horizontal development.
Upon closing the Acquisition, Striker will control 138 gross (94 net) sections of Belly River acreage, of which management currently considers approximately 1/3 prospective for Belly River horizontal oil development. On this prospective acreage, 33 gross (30.5 net) Belly River horizontal oil locations have been technically evaluated with only 3 gross (3 net) booked in the Company's 2014 year end reserve report. Corporately, and including the Acquisition, the split between Crown and Freehold on a gross acreage basis is 72% to 28%, respectively (60% / 40% net).
The Company is funding the Acquisition with its credit facility and internal sources. Net debt after the completion of the Acquisition is anticipated to be approximately $9 million.
Dundee Securities Ltd. acted as sole financial advisor to the Company with respect to the Acquisition.
The Company remains focused in its efforts to identify, capture and execute on additional opportunities, including those within its Belly River core region.