Assets include 48,000 acres and 430 BOEPD of production
Manitok Energy (ticker: MEI) announced the acquisition of Craft Oil for approximately $6.6 million in stock.
Craft owns about 48,000 acres of land in Alberta and 1.3 MMBOE of reserves. The company is currently producing about 430 BOEPD. Craft completed several divestitures in recent months and now is debt free, meaning Manitok will not need to assume debt in this transaction. Craft also has approximately $33 million in total tax pools, including approximately $17 million in non-capital losses.
The two companies have complimentary assets in the Peace River Arch area of Alberta. When both operations are combined, Manitok will be producing 675 BOEPD from the Peace River Arch area.
Craft shareholders will meet on June 5 to consider approval of the transaction. The Craft Board of Directors has already unanimously agreed to recommend the approval of the arrangement.
Recent acquisitions add 2.1 MBOEPD of production
Manitok has purchased several properties recently, including a previous transaction with Craft Oil. In September Manitok purchased assets producing 1,934 BOEPD from Craft in a $13.5 million deal. Manitok also acquired 1.1 MMcfe/d of natural gas production in the Carseland area in late April, in a deal valued at $475,000.
Manitok production continues to grow
These transactions have continued to increase Manitok’s total production. The company announced record production levels in December, exceeding 7.1 MBOEPD. Since then, Manitok has acquired approximately 605 BOEPD of production.
Manitok produced about 6,120 BOEPD during Q1 2017, a 39% increase year-over-year. The company plans to tie in three horizontal wells this quarter, which it expects will add a combined 800 BOEPD of production.
