All eyes are on Calima Energy (ASX:CE1) with the Australian-listed explorer announcing its intention to complete a pair of acquisitions, which will see the company wholly-own its Montney project, joining the bull run in one of Canada’s hottest oil and gas provinces.
The company has proposed off-market, all scrip acquisitions for its unlisted joint venture partners, TSV Montney (TSV) and TMK Montney (TMK).
TSV and TMK are supportive of the transaction, with both companies unanimously recommending shareholders accept the offer.
Calima has proposed a takeover bid for TSVM through the issue of over 268.67 CE1 shares, which values the takeover target at approximately $14.39 million. Calima has also offered a total consideration valued at approximately $7.92 million in scrip for TMK, with Calima already holding 8 million shares.
The ASX-listed company’s move to consolidate its tenements paves the way for accelerated development at the Montney project, through improved access to capital and a reduction of duplicated technical and administrative obligations.
Calima will hold a total of approximately 72,000 gross acres located within Canada’s much touted Montney Formation.
The Montney Formation is currently Canada’s most active oil and gas investment region and is estimated to contain a remaining 449 trillion cubic feet of gas, 14.4 billion barrels of condensate and 1.1 billion barrels of oil.
Calima’s Montney project is well located within the province, abutting Saguaro Resources’ tenements, which have produced over 16,600 barrels of oil equivalent by 2017 year end. The project has also received positive independent testing, confirming the presence of liquid-rich geology.
Consolidating ownership of the Montney Project has been identified by many shareholders and prospective shareholders as a key milestone,” Calima Energy managing director Alan Stein said.
“This gives the Company significantly greater flexibility as to how it funds the project and increases the number of potential investors.
“Operationally the Company is ahead of schedule and under budget leading up to a multi-well drilling campaign later in the year,” he said.
Shares in Calima Energy are up approximately 4 percent today, trading at 5.6 cents per share.