ROK Resources has agreed to acquire certain oil and gas assets in Southeast Saskatchewan, Canada from an intermediate energy producer.
Under the asset exchange agreement, ROK Resources will acquire the assets in exchange for C$26.5m in cash and sale of non-core assets to the same intermediate energy producer.
The non-core assets, which currently have production of about 475 boe/d (100% Liquids), are located in the Butte area of Southwest Saskatchewan.
These include non-operated stakes in the Butte Voluntary Unit, Bone Creek Unit and Eagle Lake Unit.
In a press statement, ROK said: “The Acquisition is accretive to ROK shareholders on key per share measures, adds high quality drilling and exploration inventory and consolidates our core focus operating area within Southeast Saskatchewan.”
The assets to be acquired by ROK include 59,435 gross acres of land located in the Pinto, Steelman & Gainsborough areas of Southeast Saskatchewan.
Currently, these assets have production capacity of about 1,500 boe/d of low-decline, liquid-weighted production, primarily producing from the Midale formation.
“The Assets, 80% of which are operated, are expected to provide the Company with $10.0 to $12.0m of incremental annualised net operating income (NOI) from existing production and drilling upside, providing additional growth potential and balance sheet stability,” the firm said in a statement.
ROK noted that the acquisition is part its long-term strategy to grow into a ‘premier’ energy producer through exploration and development and acquiring assets in favourable operating areas.
Subject to finalising the senior loan facility and certain customary conditions and regulatory among others, the transaction is planned for completion on or about 24 January 2023.