Nextraction Energy Corp. announces closing of private company acquisition and addition of Vice President Exploration
Thursday, Jan 24, 2013Nextraction Energy Corp. (TSX VENTURE:NE) (the "Company" or "Nextraction") is pleased to announce that it has closed its previously announced acquisition (the "Acquisition") of Cowboy Exploration Ltd., a closely held private oil and gas company ("Cowboy"). Pursuant to the terms of the agreement, shareholders representing 92% of the outstanding Cowboy shares have tendered to the Offer and Nextraction has issued an aggregate of 3,501,334 Common Shares to former Cowboy shareholders as payment for their Cowboy shares tendered under the Acquisition. All necessary consents and approvals have been obtained, including those of the TSX Venture Exchange.
As the offer was accepted by the holders of more than 90% of the shares of Cowboy that were subject to the offer, the Company intends to exercise its rights under the compulsory acquisition provisions of the Business Corporations Act (Alberta) to acquire the remaining shares of Cowboy that were not tendered to the Nextraction offer. A notice of compulsory acquisition will be mailed promptly to all remaining shareholders of Cowboy, other than Nextraction.
The Acquisition provides a substantial expansion to Nextraction's Alberta asset base, increasing the Company's net land position to 26.625 net sections from the current 3.125 net sections, and significantly increases Nextraction's horizontal light oil drilling inventory potential in eastern Alberta from 21 net to 46 net locations. Cowboy's 3 main properties are all operated with a high-working interest, and will allow Nextraction, as the new operator, the flexibility to develop the assets in a timely and appropriate manner. To complement the Company's successful light oil development property at Provost, the Acquisition adds 2 core areas of low to moderate risk light oil development prospects in central and southern Alberta and provides a significant exploration land position in central Alberta.
Cowboy's Eyremore property, located in southern Alberta, consists of 3 operated sections (2.9 net) of Crown land with a 96% average working interest targeting light oil in the Glauconite Formation. There is currently 1 vertical producing oil well on the property and current spacing approvals allow for up to 19 horizontal development wells. Horizontal development of the Glauconite formation has been occurring 4 townships away from the acquired property with excellent success.
In central Alberta, the Edson property consists of an operated 1.5 sections of Crown land, having a 100% working interest and multi-zone potential including light oil from the Cardium Formation. There is currently 1 standing well on the property with numerous pay zones indicated on logs. Successful horizontal development of the Cardium is occurring within 2 miles of the Cowboy lands and there is potential to drill up to 6 Cardium horizontal oil wells on the acquired land.
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