Bonterra Energy to buy several oil and gas assets in Canada

Bonterra Energy has agreed to acquire several oil and gas assets in Canada from a senior oil and gas producer for $172m.

The transaction, which is subject to regulatory approvals, is expected to be completed by mid-April.

The acquired assets in the Pembina Cardium area of Alberta include upper zones in the Belly River and Edmonton sands.

A production base will complement the existing acreage of Bonterra, and will expand the company’s long-term drilling locations.

Bonterra said the assets have an 86% weighting to light oil and natural gas liquids.

A significant part of the land is under waterflood for pressure maintenance, which is anticipated to reduce Bonterra’s corporate decline rate by about 3%.

As the assets are adjacent to Bonterra’s existing infrastructure, facility consolidations are expected lower the operating costs.

The acquisition will increase Bonterra’s proved plus probable reserves to 93.3MMBOE (million barrels of oil equivalent) from 80.2 MMBOE.

The company expects a minimal increase in 2015 capital investment from about $58m to $70m.

Bonterra has identified 132 net potential horizontal drilling locations of which only 12 have been assigned reserves in the existing reserve report.

The company’s asset base includes concentrated, stable and underdeveloped properties located throughout western Canada.

Bonterra’s average daily production reached 13,195 barrels of oil equivalent (BOE) per day in 2014.