- Sacgasco (SGC) has signed an agreement to acquire 25 per cent of Blue Sky Resources’ working interest in Canadian oil and gas assets
- The interest acquisition would add approximately 1500 barrels of oil equivalent per day to the company’s Canadian production
- Sacgasco will pay consideration of approximately A$1.03 million, plus 12.5 million company shares at four cents each, for the acquisition
- The company expects the transaction to close during the third quarter of the 2021 calendar year
- Sacgasco is up 2.78 per cent and trading at 3.7 cents per share
Sacgasco (SGC) has signed an agreement to acquire 25 per cent of Blue Sky Resources’ working interest in Canadian oil and gas assets.
The assets consist of non-operated working interest and royalty interest in 31 gas and oil fields, as well as their associated infrastructures, in Alberta and British Columbia.
Sacgasco’s acquisition of the interest would add approximately 1500 barrels of oil equivalent per day (BOEPD) to the company’s Canadian production. This would take Sacgasco’s share of production to approximately 2000 BOEPD.
The acquisition is subject to due diligence and regulatory approvals. Blue Sky must also complete its own acquisition of the assets, before it can go on to sell the interest to Sacgasco.
The company will pay a purchase price of C$1 million (roughly A$1.03 million) cash, as well as 12.5 million Sacgasco ordinary shares. The shares, issued at A$0.04 each, will be worth approximately A$500,000 combined.
Sacgasco has already paid a deposit of $300,000, which is refundable if the company does not proceed with the transaction, based on due diligence. The company plans to fund its payment of the consideration through its existing cash, as well as cash flows from its producing assets.
Sacgasco’s Managing Director, Gary Jeffery, called the transaction in Canada a prime example of underexplored, undervalued assets supported by invaluable infrastructure and facilities.
“We are again capitalising on our ability to identity assets that have considerable upside and can be acquired at attractive prices,” he said.
“With the recent strength in the oil prices, and every indication that this will continue, Sacgasco and its JV are primed to benefit from this and our operators’ ability to significantly enhance current production levels,” he added.
Sacgasco expects the transaction to close during the third quarter of the 2021 calendar year.
Sacgasco is up 2.78 per cent, trading at 3.7 cents per share at 11:09 am AEST.