Australian and Toronto listed oil and gas company Aurora Oil & Gas Limited (AEF.TO) on late Thursday said it has agreed to buy a 100% operated working interest in about 2,700 net acres in South Texas for $117.5 million. The effective date of the acquisition will be March 1.
The assets consist of two consolidated blocks located within the liquids-rich zone of the Eagle Ford shale trend and are either adjacent to or very proximate to Aurora's existing Sugarkane Field acreage.
The assets include average December 2012 production of approximately 1,620 boe/d net of royalties from 11 wells and associated interests in field infrastructure and related assets. The production comprises 84% liquids, and represents a 12% increase to Aurora's 2012 exit production.
The company expects the acquisition to increase its net core Eagle Ford shale acreage by about 14% to over 21,800 net acres. The acreage includes potential additional reserves in Austin Chalk and Pearsall formations.
After the deal, Aurora will become the operator of the assets. In addition, the company has secured new and existing contractors to assist in project execution in a manner consistent with local industry practices.
The company expects to satisfy the purchase price and associated development capital through existing and new debt facilities. Aurora has obtained bridge loan commitments of $125 million from Credit Suisse Securities (USA) LLC and UBS Securities LLC.
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