The purchase price will be paid in half with cash and the other half with the issuance of no less than 1,100,000 common shares of the company. The acquisition remains subject to certain conditions, including financing and TSX approval.
Three of the sections to be acquired are in the company’s core Sedalia area, close to Magnum’s existing production and operations. These lands offset a recently drilled new pool gas discovery and will add to drilling inventory, production and reserves in the area.
The remaining 10.75 sections are in a block of 100% owned and operated lands in west central Alberta stretching from Pembina to Windfall. These lands have defined drilling locations for both light oil and liquids rich gas. This will add a new second core area to exploit as Magnum increases its cash flow from Sedalia and will diversify its production base.
Initially, 11 drilling opportunities have been identified, geologically and seismically, on the lands. The company believes that these initial drilling locations have the potential to add up to 1000boe/d of production.
