The acquisition will include four wells currently producing a total of 30 barrels of oil per day from the Viking A pool.
The acquisition is expected to close on or before 15 March 2011.
The terms of the joint venture agreement provide for the companies to acquire the 100% owned property from a third private party for $2.8m on a fifty-fifty basis.
Nextraction will fund 100% of the acquisition and receive 100% of the production revenue until payout of the purchase price, or until Magnum has paid to Nextraction 50% of the purchase price.
Nextraction will also pay 100% of the costs to drill and complete to tie-in two horizontal wells to earn its 50% interest.
The wells are projected at 800m in depth and at least 900m horizontally, with the first well commencing before 30 June 2011.
