OKOTOKS, ALBERTA -- (Marketwire) -- 01/03/13 -- RedWater Energy Corp. ("RedWater" or the "Company") (TSX VENTURE: RED) is pleased to announce that it has entered into an agreement to complete a strategic asset acquisition in its core Redwater area of operation. The acquisition expands RedWater's extensive inventory of identified Mannville and Viking oil opportunities in the area.
The Company is also pleased to provide an operational update on recent well operations and fourth quarter drilling activities.
The purchase price of the acquisition is $2,500,000 (plus customary post-closing adjustments). The Company will utilize working capital on hand, cash flow from operations and available credit facilities to complete the acquisition. We expect to close the acquisition by January 31, 2013 with an effective date of December 1, 2012.
The acquisition will increase RedWater's production by approximately 45 barrels of oil per day and 180 mcf per day of natural gas (30 boepd) for a total of 75 boepd. In addition, the Company acquired 9.4 sections of undeveloped land in Redwater and Westlock. RedWater has identified an additional 10 drilling locations on the land and a number of re-entry candidates. The oil production has a reserve life index of 10.7 years. The Company will release additional transaction metrics at closing.
RedWater spud the first of its five well 2013 Redwater drilling program on December 21, 2012. The well is in the process of being tested and we expect to have the well on production in late January 2013. Results of the test and production rates will be provided in the first quarter.
Our previously announced successful re-entry at Davey Lake is in the process of being tied in and we expect the well to be on production by end of January 2013. The Company anticipates producing under restricted conditions at 45 barrels of oil per day and 300 mcf of natural gas per day (50 boepd) for a total of 95 boepd to ensure stable rates.
We anticipate exiting the first quarter of 2013 with total production of 200 barrels of oil per day and 630 mcf of natural gas per day (105 boepd) for a total of 305 boepd.
Business of RedWater Energy Corp.
RedWater Energy Corp. is an emerging oil and gas exploration and development company. RedWater is engaged in the acquisition, enhancement and exploration of conventional oil and gas projects in Western Canada with a focus on developing high working interest light oil opportunities. RedWater's core properties are located in Redwater, Westlock, Fairydell-Bon Accord and Panny areas of Alberta. www.redwaterenergy.com.
Forward-looking information and statements
This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following; the timing for completion and equipping of wells; the volume and product mix of RedWater's oil and gas production and its ability to develop RedWater's oil resource properties, the use of the RedWater's cash flow from operations and expanded credit facilities; the number of wells to be drilled and potential development drilling and number of potential oil development locations.
Most Popular Stories
- Facebook, Twitter Announce Apps for Google Glass
- European Car Sales up First Time in 20 Months
- Will Yahoo Splurge on $1-Billion acquisition of Tumblr?
- Exciting Night for UFC Fans
- RFD-TV launches on Charter Cable
- Teen Drivers Should Be Prepared for Any Car-Related Situation
- 'Star Trek Into Darkness': The Return of Khan?
- Google Fiber Making an Impact
- Entrepreneurs Chase Social Media
- Financial Times Twitter, Email Hacked