Marquee Energy Acquires Land Rights and Infrastructure to Expand Core Area at Michichi

Marquee Energy (TSXV:MQL) announced that it has entered into an agreement to acquire land and gas-processing infrastructure within its core area at its Michichi property in Banff.
As quoted in the press release:

The Acquisition includes approximately 550 boe/d (25% Oil & NGLs) of production,  21 net sections of land with Banff rights contiguous with the heart of Marquee’s light oil play, and extensive infrastructure. Consideration for the Acquisition is approximately $11.98 million to be funded through an accompanying infrastructure-based facility financing.
The Transaction and Facility Agreement are both scheduled to close on or before August 19, 2015, subject to standard regulatory approvals. Upon closing, Marquee will own approximately 270 net undeveloped sections of land in its Michichi core area and expand its horizontal oil prospect inventory to more than 290 locations.
The Acquisition represents the fourth significant consolidation negotiated by Marquee in its Michichi core area in the last 20 months. Marquee’s geologic and seismic mapping supports the expansion of the multi-zone oil fairway over the lands and infrastructure involved in the Transaction. The Company’s technical work identified 42 drilling locations with dual zone potential, of which as many as 20 locations may have triple zone oil potential.
The assets are ideally situated, provide significant operational synergy and are expected to lead to reductions in operating costs and future capital costs due to shorter tie-ins and processing flexibility. Rationalization of current operations and synergies with the Acquisition are anticipated to result in smooth integration of the new production and infrastructure, with minimal impact to the Company’s current operating cost budget. Marquee also believes that the Transaction will have no effect on its current LLR Assessment.
The key highlights of the Acquisition are as follows:

• Continued consolidation of Marquee’s core area at Michichi
• Addition of 42 dual-zone well locations and 21 net sections of land with Banff rights
• Operation and control of an additional gas plant with current capacity of 10 mmcf/d and expansion of Marquee’s owned and operated gas-gathering system
• Reductions in operating costs and future capital expenditures with shorter tie-ins to existing infrastructure
• Consolidation and expansion of working interest on key waterflood pilot lands
• Third party gas handling revenues of approximately $500,000 per year

Click here to read the full Marquee Energy (TSXV:MQL) press release.