- Sacgasco (SGC) has completed its purchase of a 20 per cent interest in several oil and gas producing assets in southern Alberta, Canada
- The assets consist of oil and gas fields as well as associated production equipment, located between Edmonton and the U.S. border
- $510,000 in cash was paid to Blue Sky Resources along with 1.92 million shares at a price of 7.3 cents each, valued at $140,000
- Current production from the assets is around 100 barrels of oil per day, and the company is now looking to increase capacity to 500 barrels per day by the end of February
- Sacgasco is up 10.71 per cent to 9.3 cents per share
Sacgasco (SGC) has completed its purchase of a 20 per cent interest in several oil and gas producing assets in southern Alberta, Canada.
Located between Edmonton and the U.S. border, the assets consist of several reactivated oil and gas fields in the Little Bow, Taber and Bellshill areas, as well as associated production equipment.
Sacgasco paid a total of $510,000 in cash to Blue Sky Resources, which will act as the operator of the assets, and issued 1.92 million shares at a price of 7.3 cents each, valued at $140,000.
Current production is estimated at approximately 100 barrels of oil per day, and steps are now being taken to increase capacity to 500 barrels per day by the end of February at a cost of approximately $170,000 to Sacgasco.
Average production levels over the last five years — before production was shut-in as a result of the COVID-driven oil price collapse — was in excess of 2000 barrels of oil equivalent per day, and in 2019 the wells averaged roughly 1400 barrels of oil equivalent per day.
“The recent strength in the oil prices, up over 40 per cent since we initiated the first agreement to acquire oil assets, with every indication that this will continue, places Sacgasco in an enviable position to benefit from our operator’s ability to significantly enhance current production levels,” said Gary Jeffery, Managing Director of Sacgasco.
“The assets are non-operated and will allow Sacgasco to focus on its operated assets in the Sacramento Basin, especially the imminent spudding of the Borba Prospect well,” he added.
Earlier today, ASX-listed Xstate Resources (XST) revealed it has also bought a 10 per cent stake in the assets.
Sacgasco is up 10.71 per cent to 9.3 cents per share at 4:22pm AEDT.