CALGARY, June 22, 2017 /CNW/ – Bow River Energy Ltd. (“Bow River” or the “Company”) is pleased to announce the closing of a transformational asset acquisition from a major integrated oil and gas company in the Provost area of Alberta. The assets include low-decline, medium-gravity oil producing assets, a large seismic database and a regional sour gas plant with an extensive associated gathering infrastructure. The assets integrate well with Bow River’s existing oil assets, and provide a strong platform for growth. Bow River’s consolidated production is now 2,500 boe/d, 60% of which is medium/heavy oil production.
The acquisition will nearly triple Bow River’s existing oil production base and add significant upside potential. To date, we have de-risked 43 firm development drilling locations and a minimum of 200 b/d of reactivations and workovers. In addition, Bow River has acquired an extensive 2D and 3D seismic database over lands in the broader Provost area including large areas not associated with lands acquired in the deal, as well as over existing Bow River lands. This seismic database will contribute to further development and exploration in the Provost area. Further, we have also acquired sole ownership of a 15 mmcf/d sour gas processing plant and associated pipeline infrastructure that exclusively serves the Provost area and generates substantial free cash flow.
The acquisition solidifies and strengthens Bow River’s placement in the Provost area. Industry drilling activity in this area has increased in the last year, in particular in the Sparky, Dina and Rex formations where monobore drilling and improved logging technology allows economic production in much thinner reservoirs.
The 100%-owned Provost sour gas processing plant is the only sour gas plant in the region, and represents a material opportunity and strategic advantage for Bow River. Cash flows from the plant are almost exclusively tied to third party volumes processed and are currently strongly positive. Most of the industry activity in the region is for oil with associated sweet and sour gas, and we will be working with our customers to optimize the value equation for all parties.
The gas plant and four oil facilities are in excellent condition, which speaks to the quality and dedication of the existing team operating the assets. Bow River is delighted to welcome the existing operations team to the Company.
There are significant operational synergies present including potential for cost rationalization and increased netbacks, including transportation, water disposal and abandonment and reclamation activities.
Overall, this acquisition is strongly accretive for Bow River. With an expanded asset base, a large development inventory, ownership of a midstream asset, and increased access to seismic data, the Company emerges as key player in the Provostarea.
About Bow River Energy Ltd.
Bow River is a privately-held junior oil and gas producer, funded entirely by its Board of Directors, Management, employees and close associates. The Company’s focus is in western Saskatchewan and eastern Alberta, where it controls a large land base and infrastructure. Bow River has an average working interest of approximately 85%, and operates 85% of its production. The Company’s strategy is to pursue cooperative acquisitions, negotiated in close association with the vendors, optimizing the transaction structure for both parties. Bow River also has strong track record of production and cost optimization, extending the life of relatively mature assets. This is overlain with a major focus on environmental responsibilities, in particular with respect to efficient and proactive management of abandonment and reclamation obligations.
Forward Looking Information
Certain statements contained in this release include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this release includes, but is not limited to: decline rates; potential drilling locations; possible production increases; free cash flow; operational synergies; cost rationalization; increased netbacks; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; opportunities available to or pursued by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bow River disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
SOURCE Bow River Energy Ltd.
For further information: Bow River Energy Ltd., Henry Cohen, President and CEO, 403 475 4100; Or Bow River Energy Ltd., Daniel Belot, VP Finance and CFO, 403 475 4100