Australis Oil & Gas has signed a purchase and sale agreement (PSA) through its indirect, wholly owned American subsidiary Australis TMS to acquire Tuscaloosa Marine Shale (TMS) assets from Encana Oil & Gas (USA), a wholly owned subsidiary of Encana Corporation.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Australis Oil & Gas will pay $80m for the deal.
The assets include working interests in 31 operated and producing wells (29 net wells) and 16 non-operated producing wells (1.6 net wells), as well as 62,000 net acres leased (35% HBP) within the production-defined TMS Core area and within permitted drilling units.
The acquisition also includes an additional 60,000 acres within the TMS Core area outside of existing permitted drilling units.
Australis chairman Jonathan Stewart said: “The TMS Asset acquisition is the transformational acquisition we have been looking for since we formed Australis in late 2014.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"We’ve looked at many opportunities, have remained patient and in our view nothing we have seen compares to the fundamental value and considerable upside potential that this transaction delivers.
“We see many parallels to the early days of the Eagle Ford. We believe that our Aurora Oil & Gas experience in the Eagle Ford from discovery to full development and then sale in 2014 offers us key learnings to apply to generating significant value for shareholders.
“Australis will become the largest holder in one of the few remaining undeveloped oil producing shale basins in the United States, and our large position is in the productive oil rich core of the TMS.”
After the completion of this acquisition, Australis will operate more than 100,000 net acres in TMS.
The acquired acreage lies adjacent to Australis’ existing 50% working interest in 38,000 acres within the TMS Core.
Once the transaction is completed, Australis will receive the operatorship of these assets. The current Encana field staff will be moved to different positions at Australis.
Australis initially plans to focus on maintaining and extending certain leases located in the 40,000 net acres within the existing permitted drilling units. It also intends to involve third parties in the next phase of development activity in TMS.
Image: Tuscaloosa Marine Shale rig. Photo: courtesy of Encana Corporation.
