SYDNEY: Xstate Resources Limited has signed an agreement with private company Blue Sky Resources Ltd to acquire 25% of Blue Sky’s Working Interest (WI) in oil and gas producing asset in Alberta and British Columbia, Canada (ABC Assets), a news release said on Wednesday.
The ABC Assets consist of non-operated WI and Royalty Interests in 31 gas and oil fields and associated infrastructure.
The acquisition by Xstate is subject to regulatory approvals and the completion of the acquisition of the ABC Assets by the vendor Blue Sky Resources Limited. The acquisition is also subject to 45 days due diligence by Xstate.
Xstate’s asset purchase price is AUD$1.03 million plus the issue of 71,4 28,571 Xstate shares to the value of AUD$500,000 at a deemed issue price of AUD$0.007 per share (16.7% premium to Closing Price on 26 April 2021) at closing of the acquisition (the issue of the shares is subject to shareholder approval).
A deposit of C$300,000 has been paid, which is refundable should XST not proceed based on due diligence. Closing of the purchase is expected in the 3rd Quarter of calendar 2021. Current ABC Asset production is around 1500 BOEPD net to XST’s acquired WI.
This takes Xstate’s share of total production in Canada (post this acquisition) to 1800 BOEPD.
The Assets acquisition can be funded from cash reserves and cash flows from Xstate’s producing assets.
Xstate Managing Director, David McArthur commented: “We are pleased to add this suite of producing assets to our Canadian Producing Portfolio. We are building a company of scale in Canada and these assets will be integral to this process. The assets are highly complementary to our existing production, with all production operated by our close and trusted partner in Canada, Blue Sky Resources Limited.”
Xstate Resources (ASX:XST) is an ASX listed company focused on the oil and gas sector. The Company has existing assets located in the Sacramento Basin in California and associated production interests together with production interests in Alberta Canada. Xstate is presently pursuing new opportunities in the oil and gas sector in North America.