Pine Cliff Energy Ltd (CVE:PNE), (OTCMKTS:PIFYF) Announces Oil and Gas Asset Acquisition
Yesterday trading of Pine Cliff Energy Ltd (CVE:PNE), (OTCMKTS:PIFYF) shares was halted momentarily. The halt was by request of the company and was triggered in relation to the major news release that came from CVE.
The company announced that it entered into a binding agreement for the acquisition of oil and gas assets, located in one of the company’s core areas in Alberta. The deal is valued at $33.25 million and the assets acquired are described as having a low-cost profile and a low decline rate, as well as a long reserve life. The land borders PNE‘s core area in the Carrot Creek area.
Some of the key acquisition attributes listed in the deal announcement include the following:
- production of 970 barrels of oil equivalent (boe) per day
- proved reserves of 2.9 Mboe
- decline rate of 24%
The company explains the strategic purpose of the acquisition as an effort to add low-cost, low-decline natural gas production assets. Among the anticipated results of the acquisition PNE also lists ‘significant free cash flow’ that should allow the company to seek additional gas acquisitions and clear debt.
After trading resumed in the afternoon PNE popped briefly and licked $1.90 per share but then the share price quickly returned near its previous close and eventually ended the session nearly flat, 0.5% in the green.