Proposed acquisition brings Blackbird’s holdings to 115 sections
Blackbird Energy Inc. (ticker: BBI) announced today that it has entered into a letter of intent with Paramount Resources Ltd. for the acquisition of 13 gross sections of Montney rights (3.1 net) for total consideration of 5 million Blackbird common shares. These lands are contiguous with Blackbird’s existing lands and will, upon closing, increase Blackbird’s Montney rights at Elmworth/Pipestone to 115 gross sections (99.9 net).
Overview of the Acquisition Lands
See below for a map of Blackbird’s current lands and the acquisition lands. In total, the acquisition lands are comprised of 13 gross sections of Montney rights (3.1 net) which are on strike geologically with Blackbird’s existing lands. The acquisition lands are located south of the Wapiti River in close proximity to the company’s existing infrastructure, and they are contiguous with Blackbird’s existing land block.
Source: Blackbird
Strategic Rationale for the Acquisitions
Blackbird believes that this acquisition will be beneficial to the company for several reasons:
- Post-closing of the Paramount Acquisition, Blackbird will hold 115 gross sections of Montney rights (99.9 net) in the prolific Elmworth/Pipestone corridor, with significant blocks of land both north and south of the Wapiti River;
- Combined with Blackbird’s current Elmworth/Pipestone lands, the acquisition lands form a large contiguous block of lands south of the Wapiti River in close proximity to Blackbird’s existing infrastructure;
- Management estimates that the acquisition adds between 104 and 312 gross drilling locations (25 – 74 net) to Blackbird’s drilling inventory south of the Wapiti River (calculated using one mile laterals, two to four intervals per acquired section, and four to six wells per interval). These locations increase the company’s ultimate reserves and production potential;
- Combined with Blackbird’s current production, the additional drilling inventory located south of the Wapiti River will contribute to Blackbird’s current processing and take-away commitments upon the construction of an eastern pipeline gathering system;
- Combined with Blackbird’s current Elmworth/Pipestone drilling inventory, the additional drilling inventory provided by the acquisitions will help to achieve the scale required to execute large-scale processing and take-away agreements; and
- The Paramount Acquisition allows the company to increase its Montney land holdings at Elmworth/Pipestone while maintaining its balance sheet strength.
Anticipated Closing
Closing of the Paramount acquisition is subject to Blackbird and Paramount entering into a purchase and sale agreement, which will be subject to TSX Venture Exchange acceptance and certain other conditions customary for acquisitions of this nature. Closing of the acquisition is expected to occur by the middle of March, 2017.
EnerCom Dallas presenter: GDPP
Blackbird Energy will be presenting its story at the Tower Club Downtown Dallas on Thursday, March 2, as part of EnerCom Dallas, an investor conference which is modeled after EnerCom’s The Oil & Gas Conference® in Denver.
The Dallas conference is designed to offer investment professionals a unique opportunity to listen to a wide variety of oil and gas company senior management teams update investors on their operational and financial strategies and learn how the leading independent energy companies are building value in 2017.
The forum offers healthy dialogue and informal networking opportunities for attendees.
To sign up for EnerCom Dallas and hear Blackbird, or to find out more information about presenting companies and industry experts speaking at EnerCom Dallas, click here to visit the conference website.
