TORC Oil & Gas agrees to acquire oil assets for $128 M

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TORC Oil & Gas agrees to acquire oil assets for $128 M

TORC Oil & Gas Ltd. (TORC) has announced that it has entered into an agreement to acquire light oil assets which are complementary to TORC’s existing conventional assets in southeast Saskatchewan (Canada).

The strategic acquisition includes over 1,550 boepd (94% light oil and liquids) of high quality, low decline, strong netback, light oil producing assets. Total consideration for the acquisition is approximately $128 million, before adjustments, and is payable through the issuance of 16.0 million common shares of TORC.

The acquisition is consistent with TORC’s strategy to capitalize on opportunities to enhance the quality of its asset base throughout the commodity price cycle. The Acquired Assets improve TORC’s decline profile, operating netback and light oil drilling inventory.

The assets are 94% light oil and liquids and have an average decline rate of approximately 20% providing a dependable free cash flow stream to further strengthen TORC’s disciplined growth plus sustainable dividend business model.

Additionally, TORC has identified approximately 50 (net) high quality conventional light oil drilling locations on the Acquired Assets which will provide some of the highest relative economic returns in the Western Canadian Sedimentary Basin in all commodity price environments.

Brett Herman, President and CEO stated:
“The Acquisition complements our conventional light oil platform and provides a strong and stable cash flow base further strengthening the sustainability of our business model while the high quality drilling inventory will enhance our capital program for years to come.”

In connection with the acquisition, TORC has entered into the acquisition agreement with a number of vendors to acquire all of the issued and outstanding equity interests of certain private companies and a partnership that holds the acquired assets.

Completion of the acquisition is subject to certain conditions and the receipt of all required regulatory approvals, including the approval of the TSX and necessary competition approvals. The Acquisition is anticipated to close on or about February 25, 2015.

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