Website - http://www.weltonenergy.com/
Number Trading - 1,978,709
Expiration Date - August 4, 2007
Cusip - 950456 11 1
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Welton closes Era Oil & Gas acquisition
2005-09-06 07:46 MT - News Release
Welton Energy Corp. has closed the previously announced acquisition of Era Oil & Gas Corp., a private oil and gas company. The total consideration paid was $10.5-million.
The main assets acquired through this transaction are 25-per-cent non-operated interests (12.5-per-cent interest in one-third of the pool) in the Bailey heavy oil pool in west-central Saskatchewan. Six wells currently producing in this pool average relatively high rates of production -- in excess of 150 barrels of oil per day (gross) -- which contribute to low operating costs of approximately $6.00 per boe. Welton's share of production from the pool, now about 225 boe/d, is expected to double to over 450 boe/d when nine additional existing wells are tied following completion of an expansion to the central production facility scheduled for early October, 2005.
Reserves related to this acquisition have been independently evaluated by Gilbert Lausten Jung Associates Ltd. As of Aug. 1, 2005, total proved reserves of 542,000 boe and total proved plus probable reserves of 650,000 boe have been assigned. Welton also acquired approximately 9,500 acres gross (2,300 acres net) of undeveloped land.
Welton's analyses indicate there is substantial additional development drilling potential on these lands and the company plans to participate in the drilling of approximately 15 wells in the area before year-end, mainly infill and stepout development wells. Additional drilling of the main pool including exploration and follow-up drilling of nearby undrilled lands is being planned for 2006.
Welton's significant tax pool position of about $36-million prior to the acquisition will provide valuable tax shelter to the acquired production.
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