- Sacgasco (SGC) intends to purchase a 20 per cent working interest in further oil and gas producing assets in Alberta, Canada
- The new assets are from reactivated oil fields that were shut down during 2020 due to low oil prices relating to COVID-19
- For the assets, the energy stock will pay $510,000 in cash and over 1.9 million shares
- Last year, Sacgasco purchased a 30 per cent working interest in the Red Earth asset, which is also in Alberta, this deal is expected to be completed before March 2021
- Before further work is implemented, the latest acquisition will take the company’s share in Alberta to around 400 barrels of oil per day
- On the market this morning, Sacgasco is up 15.5 per cent and is trading at 8.2 cents per share
Sacgasco (SGC) intends to purchase a 20 per cent working interest in further oil and gas producing assets in southern Alberta, Canada.
The new assets are from reactivated oil fields and include oil and gas fields and the associated production equipment. Notably, the assets are located between the Edmonton and the U.S. border.
The purchase price is $510,000 in cash and over 1.9 million shares, which are valued at $140,000.
Just last year, Sacgasco purchased a 30 per cent working interest in the Red Earth asset, also in Alberta. This deal is expected to be completed before March 2021.
Before further work is implemented, the latest acquisition will take the company’s share in Alberta to around 400 barrels of oil per day (BOEPD).
Before COVID-19, the average production for the last five years at the new assets was over 2000 BOEPD. The wells were shut during 2020 due to low oil prices related to the pandemic.
Managing Director Gary Jeffery says Sacgasco has been looking at opportunities to develop underexplored and undervalued assets.
“These assets will strengthen Sacgasco’s growing production and development portfolio in North America and provide Sacgasco with diversity and resilience that is complementary to the World Class opportunities for Natural Gas in the Sacramento Basin,” he said.
“The assets are non-operated and are not expected to distract Sacgasco from its operated assets in the Sacramento Basin,” he added.
On the market this morning, Sacgasco is up 15.5 per cent and is trading at 8.2 cents per share at 10:09 am AEDT.