To buy Montney land holdings within the Umbach-Nig area of NE British Columbia covering 98,000 net acres.
Yoho Resources Inc. (TSXV: YO) announced Jan. 23 that it entered into agreement for the sale of its Montney acreage in the Nig area of Northeast British Columbia to Storm Resources Ltd. (TSXV: SRX) for $87.7 million.
The acquisition increases Calgary-based Storm's Montney land holdings in the Umbach-Nig area to 98,000 net acres and includes two 100% working interest horizontal wells with one producing from the upper Montney and the other from the lower Montney. The five horizontal wells averaged 3.7 million cubic feet per day (MMCf/d) gross raw gas over the first 90 operating days and first year production is forecast to be 2.4 MMcf/d gross raw gas.
The transaction will provide Yoho, of Calgary, with further flexibility to fund its planned exploration and development activities on its Duvernay acreage.
Storm will use its credit facility to pay the cash portion of the acquisition. The facility will be repaid from a $34.8 million bought deal financing and non-brokered private placement. Closing is expected to occur by Jan. 31.