Yoho Resources Inc. (TSX VENTURE:YO) has entered an agreement to sell a portion of its Duvernay assets in the Kaybob area of Alberta for $50 million, prior to adjustments, according to a news release.
Yoho will retain about 25% of its net Kaybob Duvernay acreage consisting of 5.5 sections at 100% working interest and its recently completed well at 16-12-59-19 W5.
The assets being sold are predominantly non-operated and consist of 10,290 net acres with an average working interest of 39%, the release said. Average production net to Yoho from these assets was about 890 barrels of oil equivalent per day (boe/d) for the first nine months of fiscal year 2015. Based on a reserves evaluation completed by GLJ Petroleum Consultants Ltd., effective Sept. 30, 2014, the reserves are:
On completion of transaction, Yoho will hold:
- 27 net sections (average working interest 90%) in the greater Inga area of British Columbia where the company has a multi-zoned Triassic play, currently focused on the Montney Formation. Recent industry activity in close proximity to Yoho's acreage confirmed excellent potential for a horizontal liquids rich Montney resource development play on these lands.
- 5.5 sections (100% working interest) of contiguous Duvernay land in Kaybob which will be continued by the recently completed well at 16-12-59-19 W5. The well was completed with 11 stages during October 2015 at a cost of $5.2 million. At the end of a 124-hour cleanup flow period, the well was flowing at a restricted rate of 2.4 million cubic feet per day (MMcf/d) with approximately 80 barrels per MMcf of associated field condensate. Yoho is currently reviewing tie-in options for this well. Under full development, this land block could accommodate 25 to 30 horizontal wells.
- Other conventional assets with current estimated production of about 600 boe/d consisting of 2.5 MMcf/d of natural gas and 170 barrels per day of oil and natural gas liquids, with an additional 100 boe/d of gas production currently shut in due to pipeline restrictions, the release said.
The transaction has an effective date of Dec. 1, 2015, and is expected to be completed on or before Dec. 17, 2015. It is subject to customary conditions, including receipt of all applicable regulatory approvals. BMO Capital Markets acted as financial advisor to Yoho for the transaction, the release said.
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