CALGARY, ALBERTA–(Marketwired – Feb. 22, 2017) – (TSX VENTURE:BBI) Blackbird Energy Inc. (“Blackbird” or the “Company“) is pleased to announce that it has entered into a letter of intent with Paramount Resources Ltd. (“Paramount“) for the acquisition of 13 gross sections of Montney rights (3.1 net) for total consideration of 5 million Blackbird common shares (the “Paramount Acquisition“). These lands (the “Acquisition Lands“) are contiguous with Blackbird’s existing lands and will, upon closing, increase Blackbird’s Montney rights at Elmworth / Pipestone to 115 gross sections (99.9 net).
Overview of the Acquisition Lands
See Figure 1 below for a map of Blackbird’s current lands and the Acquisition Lands. In total, the Acquisition Lands are comprised of 13 gross sections of Montney rights (3.1 net) which are on strike geologically with Blackbird’s existing lands. The Acquisition Lands are located south of the Wapiti River in close proximity to the Company’s existing infrastructure, and they are contiguous with Blackbird’s existing land block.
Figure 1 – Blackbird’s Current Lands and the Acquisition Lands
Strategic Rationale for the Acquisitions
The strategic rationale for the Acquisition is as follows:
- Post-closing of the Paramount Acquisition, Blackbird will hold 115 gross sections of Montney rights (99.9 net) in the prolific Elmworth / Pipestone corridor, with significant blocks of land both north and south of the Wapiti River;
- Combined with Blackbird’s current Elmworth / Pipestone lands, the Acquisition Lands form a large contiguous block of lands south of the Wapiti River in close proximity to Blackbird’s existing infrastructure;
- Management estimates that the Acquisition adds between 104 and 312 gross drilling locations (25 – 74 net) to Blackbird’s drilling inventory south of the Wapiti River (calculated using one mile laterals, two to four intervals per acquired section, and four to six wells per interval). These locations increase the Company’s ultimate reserves and production potential;
- Combined with Blackbird’s current production, the additional drilling inventory located south of the Wapiti River will contribute to Blackbird’s current processing and take-away commitments upon the construction of an eastern pipeline gathering system;
- Combined with Blackbird’s current Elmworth / Pipestone drilling inventory, the additional drilling inventory provided by the Acquisitions will help to achieve the scale required to execute large-scale processing and take-away agreements; and
- The Paramount Acquisition allows the Company to increase its Montney land holdings at Elmworth / Pipestone while maintaining its balance sheet strength.
Closing of the Paramount Acquisition is subject to Blackbird and Paramount entering into a purchase and sale agreement, which will be subject to TSX Venture Exchange acceptance and certain other conditions customary for acquisitions of this nature. Closing of the Acquisition is expected to occur by the middle of March, 2017.
Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Elmworth, near Grande Prairie, Alberta.
For more information please view our Corporate Presentation at www.blackbirdenergyinc.com.