Storm Resources Announces Completion of Acquisition and Operational Update
STORM RESOURCES LTD. (SRX.V) announced the closing of the previously announced acquisition of 150 Boe per day in the Mica area of north eastern British Columbia. Production comprises approximately 70% light oil (38 degrees API) and natural gas liquids and 30% natural gas. The effective Aquisition date is September 1, 2011 and the net purchase price at closing amounted to $15.4 million, including adjustments. The purchase price was financed from existing cash resources and an expanded credit facility.
There are seven producing wells on the property with an average annual decline of 6% and the working interest being acquired is 100%. The drilling of six infill wells and the initiation of a waterflood could potentially lift production to 450 Boe per day. Future development capital associated with this activity is estimated to be $12.6 million.
In the Horn River Basin, completion operations on the second horizontal well (40% working interest) began November 12th and were suspended November 29th following an unexpected operational problem. After the first fracture stimulation was pumped, the bridge plug required to isolate the first interval became stuck in the horizontal section while it was being moved into position. The bridge plug was retrieved; however, the delay resulted in the expiry of the window of availability for the fracturing crew.
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