Obsidian Vitality Ltd. is promoting its working belongings within the Pembina oil area in Alberta, Canada, to InPlay Oil Corp. for roughly $224.77 million (CAD 320 million).
Obsidian will retain its non-operated holdings in Pembina Cardium Unit #11, the corporate mentioned in a information launch.
The Pembina belongings embody 498 web sections of land within the Pembina space of Central Alberta, together with related services and gathering techniques.
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Consideration for the acquisition will encompass $154.53 million (CAD 220 million) in money, $59.71 million (CAD 85 million) of InPlay’s widespread shares, and InPlay’s 34.6 % working curiosity within the Willesden Inexperienced Cardium Unit #2 oil area, which might convey Obsidian Vitality’s possession within the area to 99.8 %. This extra curiosity is estimated to be valued at $15 million, in response to the corporate.
As a part of the transaction, Obsidian Vitality mentioned it has agreed to drill 4 wells on two pads within the Pembina space throughout the first quarter of 2025 at InPlay’s expense. All rights to the wells and related infrastructure will likely be transferred to InPlay upon the shut of the transaction.
The efficient date of the transaction is December 1, 2024, and is anticipated to shut early within the second quarter of 2025, topic to approval by InPlay shareholders, receipt of all crucial regulatory approvals and the satisfaction of different customary closing circumstances.
Obsidian Vitality mentioned the transaction permits the corporate to give attention to its gentle oil improvement in Willesden Inexperienced, a part of the Willesden Inexperienced Oil and Fuel Subject and the Duvernay Formation.
As a part of the transaction, InPlay will assume all belongings and liabilities related to the Pembina belongings.
InPlay mentioned in a separate assertion that the petroleum and pure fuel belongings are producing roughly 10,000 barrels of oil equal per day (boepd), consisting of 68 % oil and pure fuel liquids (NGLs).
Inplay famous that the acquired belongings would lead to a larger than 100% enhance in its manufacturing and an over 170 % enhance in its gentle oil manufacturing, to over 18,750 boepd, with oil manufacturing rising to over 9,500 barrels per day (bpd).
“The profitable execution of our development plan thus far has put us able to rationalize our asset portfolio at a worth that we consider to be accretive to our shareholders, whereas securing elevated monetary flexibility and meaningfully decreasing asset retirement obligations,” Obsidian Vitality President and CEO Stephen Loukas mentioned.
“Upon transaction shut, we emerge as a considerably extra centered firm with a capability to speed up our shareholder worth creation technique. Professional forma, Obsidian Vitality may have a manufacturing base of over 29,000 boepd (based mostly on estimated fourth quarter 2024 manufacturing) with Peace River now changing into our largest asset, the place we’ll proceed to execute on our development plan and additional develop our Clearwater and Bluesky manufacturing. Our Willesden Inexperienced and Viking gentle oil belongings will proceed to generate secure manufacturing and free money circulation to help Peace River’s improvement whereas sustaining optionality of rising each belongings during times when commodity costs and returns are conducive to doing so,” Loukas added.
“We additionally count on to safe extra future share value appreciation from our InPlay Share place because the addition of the Pembina Property is each financially and strategically accretive to InPlay. Throughout the second half of 2025, Obsidian Vitality will take into account totally different monetization choices for our InPlay Share place with the purpose of recycling that capital,” he mentioned.
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