Oil and gas exploration company Foothills Exploration is set to acquire production and development acreage, as well as additional natural gas wells in Montana, US.
The additional assets that the company plans to acquire are located in the Stillwater and Golden Valley counties.
The transaction is noted to be the second acquisition of Foothills in Montana.
Foothills signed a letter agreement with an undisclosed party to acquire nearly 5,769 acres of land and 12 shut-in natural gas wells.
The proposed acquisition also includes additional assets consisting of associated pipelines, gathering systems, compression and processing facilities, related yards and other infrastructure.
The company intends to bring the 12 shut-in wells back to production in order to generate revenue in the forthcoming terms and increase reserves.
Foothills’ technical team will continue to analyse the optimum in-field development programme. The team will further advise on how to use behind pipe potential, infield drilling opportunities, low operating costs and upside development potential.
Foothills Exploration executive chairman Kevin Sylla said: “This strategic bolt-on acquisition is a great example of our strategy of targeting adjacent oil and gas properties to build a geographically concentrated portfolio of producing or underdeveloped properties to grow scale and take advantage of optimisation and operational efficiencies.
“Furthermore, both acquisitions are shallow gas properties with depths of less than 2,500ft with relatively low development costs, which will allow us to create value for our shareholders.”
The transaction is subject to customary closing conditions and governmental approvals and expected to close in the third quarter of this year.
Last February, Foothills Exploration commenced commercial production of natural gas at the Stagecoach 111-20H horizontal well in the Uinta basin, US.
The company’s projects are located in the Rocky Mountain region, including Springs, Ladysmith, Paw Paw and Ironwood.
