Manitok Energy Enters Asset Purchase Agreement to Acquire 1,800 BOED and Fluid Processing Facility

Manitok Energy Inc. (TSXV:MEI) announced that it has entered into an asset purchase agreement with a public Alberta-based company for the acquisition of approximately 1,800 barrels of oil equivalent per day of production and a related 25,000 barrels per day fluid processing facility in the Wayne area of Alberta for a total cash consideration of $61.5 million prior to transaction costs.

As quoted in the press release:

Closing of the Proposed Acquisition is anticipated to occur on or about June 1, 2015. Manitok anticipates financing the Proposed Acquisition with approximately $47.0 million primarily from a production volume royalty of approximately 6 percent of Stolberg production through a private royalty income trust company and up to $20.0 million of infrastructure based facility financing.

The Wayne Assets are just 14 km due east of Manitok’s Entice property which provides significant synergies in regards to Manitok’s growth strategy, future facility capital requirements and field operations. There are 67,712 acres (99.5 percent average working interest) of total land with full 3D seismic coverage. The lands consist of freehold mineral rights, held by a public royalty company with an established relationship with Manitok.

Manitok will add approximately 75 BQ and 51 Glauc horizontal drilling locations to its inventory. Within that total, there are a subset of 30 Glauc and 21 BQ horizontal drilling locations within an 8 km radius of the facility that could be quickly tied into the facility through existing infrastructure with limited cost. Combined with Entice, Manitok will have approximately 137 BQ and 159 Glauc horizontal drilling locations in its core area. The Wayne facility will significantly reduce Manitok’s reliance on third party facilities and transportation systems. The facility is capable of processing 25,000 bbls/d of fluid and is directly tied into the Inter Pipeline Fund (“IPF”) Central Alberta Pipeline with 6,600 bbls/d of oil capacity which is expandable. It can handle 26,000 bbls/d of water disposal and has acid gas disposal capacity of 4.4 MMcf/d which can be expanded to 15 MMcf/d.

Click here to read the full Manitok Energy Inc. (TSXV:MEI) press release.