IPC announces completion of previously announced Canadian acquisition
January 8, 2018
International Petroleum Corp. (IPC) (TSX, Nasdaq First North: IPCO) is pleased to announce that it has completed the previously announced transformational acquisition of the stable, low-decline producing Suffield and Alderson oil and gas assets in Alberta, Canada.
The Suffield and Alderson conventional oil and natural gas assets are held over a large, contiguous land position of 800,000 net acres of shallow natural gas rights and 100,000 net acres of oil rights in south-east Alberta, Canada. Production and reserves from the assets come from conventional shallow oil and gas wells.
These stable, low-decline producing fields have low production costs and significant future development potential from a combination of low risk development drilling, well stimulation and enhanced oil recovery opportunities. IPC is operator of the Suffield and Alderson assets, with almost 100% working interest.
The purchase consideration paid by IPC at completion was approximately CAD 449 million, after taking into account closing adjustments. This consideration amount includes the deposit of CAD 40 million made by IPC in September 2017. A further CAD 12 million will be payable at end June 2018, and the purchase price may be adjusted by certain additional contingent consideration.(1)
IPC completed the previously described acquisition financing, increasing IPC’s existing reserve-based lending facility to USD 200 million and securing new acquisition credit facilities of CAD 310 million.
(1) Certain contingent purchase price payments may become payable based on increased average oil and natural gas prices during 2018 and 2019. Payments would be made for each month in which the average daily price of West Texas Intermediate (WTI) is above USD 55 per barrel (bbl) or natural gas prices at the Henry Hub are above USD 3.50 per million British thermal units (MMBtu). These payments are capped for each commodity, with a maximum combined payment of CAD 36 million in aggregate.