Storm Resources To Unite With Bellamont Exploration
To buy company with operated, high working-interest assets in Grande Prairie area of NW AB featuring 78,000 net undeveloped acres targeting Montney light oil pool, gaining 2,200 BOE/d, 6.4 MMBOE proved.
Storm Resources Ltd., Calgary, (Toronto Venture: SRX) plans to acquire Bellamont Exploration Ltd., Calgary, (Toronto Venture: BMX-A) for C$122.6 million in cash, stock and assumed debt.
Storm Resources will issue either C$0.56 per Bellamont share (up to C$20 million in cash), 0.1445 Storm share or a combination of both per Bellamont share. Storm will also assume C$40 million in net debt of Bellamont, including employee severance costs and costs associated with the transaction.
The total deal value is based on Storm's 20-day volume weighted average share price of C$3.75 and assuming maximum cash is elected which results in the issuance of 16.7 million Storm shares.
The assets includes operated, high working-interest assets in the Grande Prairie area of north-western Alberta. The properties feature 78,000 net undeveloped acres with growth coming primarily from exploitation of Bellamont's Montney light oil pool at Grimshaw and from delineating Storm's liquids rich natural gas resource in the Montney formation at Umbach.
Production is 2,200 barrels of oil equivalent per day (52% gas). Proved reserves as of year-end 2010 were 6.4 million barrels equivalent and proved and probable reserves were 11.5 million barrels equivalent. During 2011, Bellamont's Sinclair and Pembina properties were sold, which had associated proved reserves of 267,000 barrels equivalent and proved and probable reserves of 518,000 barrels equivalent. Proved and probable reserves do not reflect estimated production of 889,000 barrels equivalent during 2011.
Approximately 200 net barrels equivalent per day is currently shut in due to mechanical issues (pipeline break at Saddle Hills, liquids rich Montney gas well at Grande Prairie awaiting installation of compression).
Bellamont president and chief executive Steve Moran says, “The transaction will provide Bellamont shareholders the opportunity to participate in a larger, well capitalized company. The Storm management team has an enviable track record of value creation. The assets and operating philosophies of the two companies are very complementary in nature, with a concentration of high quality resource based opportunities.”
FirstEnergy Capital Corp. is financial advisor to Bellamont.
The deal is expected to close by late March.