CALGARY, ALBERTA–(Marketwired – Nov. 28, 2016) – Raging River Exploration Inc. (“Raging River” or the “Company“) (TSX:RRX) announces that it has closed a Viking consolidation transaction (the “Acquisition”) from an arm’s length energy producer. The Company acquired approximately 620 boe/d (97% light oil) of production and 24 net sections of land prospective for Viking light oil, for total cash consideration of approximately $58 million subject to customary closing adjustments.
The Acquisition is consistent with Raging River’s continuing strategy to consolidate the Viking light oil fairway. The Acquisition includes wells and facilities in Raging River’s core Kerrobert and Lucky Hills producing areas in southwest Saskatchewan.
Included with the acquisition is a strategic natural gas processing facility and associated pipeline network which will allow the Company to tie-in approximately 1.5 mmcf/d of natural gas production that is currently not conserved. The Company has attributed a value of $5 million to the infrastructure as the acquired facility will enable the expansion of our Kerrobert production without the need to construct a natural gas processing facility.
|Consideration:||$58 million (subject to customary closing adjustments)|
|Production(1):||620 boe/d (97% oil)|
|Land prospective for Viking oil:||15,360 net acres|
|Total drilling locations:||100 net horizontal wells|
|Cash flow multiple(3)(4):||~6.1 times|
|1.||Based on forecasted average volumes for the month of November 2016. Gross production before the deduction of royalties and without including any royalty interest.|
|2.||See Non-IFRS Measures.|
|3.||Based on WTI price US$50.00/bbl.|
|4.||Based on forecasted average volumes for the assets for the month of November 2016 and net of the $5 million of value attributed by the Company to the natural gas infrastructure.|
The Acquisition has been financed by utilizing our existing credit facilities. Net debt to funds flow from operations inclusive of the Acquisition is expected to remain below 1.0 times annualized cashflow.
Raging River is currently in the final stages of increasing our credit facilities. We have received a firm assurance from our banking syndicate of a $400 million Borrowing Base, an increase from $300 million and that this increase is expected to close in early December.