Return Energy acquires Rycroft area gas production
CALGARY, Calgary, Alberta — Return Energy Inc., through its wholly-owned subsidiary, Winslow Resources Inc., has acquired certain partner interests in its core area of Rycroft, north of Grande Prairie, Alberta, for a cash consideration of $750,000 (subject to final adjustments).
The interests acquired include the production of approximately 60 bpd of oil equivalent (80% natural gas), and the non-operated 50% interest in the company’s operated Rycroft gathering system and gas plant (Return’s ownership is now 100%). All the acquired production is processed through the Rycroft gas plant.
Based on the company’s existing independent reserve report prepared by Sproule Associates Ltd.(“Sproule”), the acquisition includes prorated proved developed producing reserves of 171,600 bpd of oil equivalent, and proved plus probable reserves of 228,400 bpd of oil equivalent. Before tax, the net present value of future net revenue discounted at 10% equals $989,000 for proved developed producing reserves and $1,266,000 for proved plus probable reserves.
Ken Tompson, Return’s President and CEO, commented, “This consolidation of interests at Rycroft has been a key part of the development plan put in place since acquiring our Peace River Arch assets in October 2016. Sole ownership of the gas plant will give us greater flexibility and control over plant throughput, in addition to allowing for potential increased revenue derived from future processing of third-party volumes.”
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