Baytex Energy to acquire Alberta heavy oil assets for C$65M
Baytex Energy announced it has entered into an agreement to acquire heavy oil assets located in the Peace River area of northern Alberta, effective October 1, for cash consideration of C$65M. The assets are located immediately adjacent to its existing Peace River lands, and add approximately 3,000 BOED of production. The acquisition is expected to close before year-end. "The acquisition will drive efficiencies and synergies in our operations and will significantly enhance our inventory of drilling locations for future growth. We see the potential to significantly increase crude oil production from the acquisition over the next two years," the company said. The deal includes 415 net sections of long-tenure oil sands leases. The assets are currently producing approximately 3,000 BOED. In addition, the acquisition includes approximately 3,000 BOED of production that is shut-in due to regulatory requirements and economics. Baytex estimates the total capital required to bring those volumes back on-line to be approximately C$30M. "We have identified significant growth opportunities on the assets, including 153 net drilling locations which are supported by the viscosity data from over 200 stratigraphic test wells," Baytex noted.