Obsidian Power Ltd is buying roughly 1,700 barrels of oil per day (boepd) of Clearwater manufacturing and 148 web sections of land within the Peace River space from an undisclosed third-party vendor.
Calgary-based Obsidian mentioned in a information launch that the anticipated value is roughly $55.52 million (CAD 76 million), web of closing changes, which the corporate plans to fund by way of debt financing. It expects the transaction to shut no later than July 14.
Upon closing of the acquisition, Obsidian may have over 680 web sections of land with Clearwater and Bluesky heavy oil rights when mixed with its different smaller acquisitions in 2024.
“The strategic worth of this acquisition represents a compelling alternative – one that’s extremely synergistic to our current Peace River land base and affords important potential for future progress,” Obsidian President and CEO Stephen Loukas mentioned. “A considerable portion of the acquired lands at Peavine are adjoining to and extends our Clearwater Dawson subject, which is offering sturdy manufacturing outcomes above our expectations”.
“Put up-closing, we anticipate a broader growth space that may yield the chance for operational synergies, in addition to improved capital efficiencies,” Loukas continued.
“The Reward Lake asset offers important potential upside, and we anticipate to start additional appraising this acreage later in 2024. As well as, this acquisition higher diversifies future growth applications within the space with extra optionality, permitting us to additional optimize manufacturing and prices. In conjunction, we adjusted our 2024 steering, decreasing our capital expenditures whereas growing our manufacturing. The acquisition strengthens our means to satisfy the aims of our 2024 – 2026 three-year company progress plan, whereas additional positioning us to drive incremental progress in shareholder worth in the course of the interval and past,” he added.
The Peace River Peavine and Reward Lake acquisition offers further manufacturing, reserves and growth potential alongside the Clearwater development from its profitable Dawson subject, Obsidian famous. It additionally will increase Obsidian’s land place with its new profitable Clearwater Dawson growth, whereas offering further exploration and appraisal. There are 148 web sections of recent land predominantly potential for the Clearwater formation.
The acquisition provides common manufacturing of roughly 1,700 barrels of oil equal per day (boepd), based mostly on April 2024 actuals, from the Clearwater formation. It additionally provides proved developed producing (PDP) reserves of two.3 million barrels of oil equal (boe), proved (1P) reserves of 6.3 million boe, and proved plus possible (2P) reserves of 12.3 million boe.
Obsidian added that it has revised its 2024 steering with manufacturing anticipated to common roughly 36,400 boepd. The corporate mentioned its 2024 capital program will proceed to give attention to creating new and current fields whereas additional delineating its Peace River asset.
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