Paramount Resources to acquire Redcliffe Exploration

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, May 11 -- Paramount Resources Ltd. has agreed to acquire Redcliffe Exploration Inc. in a purchase that values the smaller company at $68.5 million (Can.). Both companies are based in Calgary.

Paramount, which already owns 18% of Redcliffe's shares, will acquire the remaining 82% for 42¢/share.

The transaction is expected to solidify Paramount’s Peace River Arch lands targeting the Montney and Nikanassin formations at Karr-Gold Creek, and it will add to Paramount’s inventory of high quality liquids-rich gas prospects.

Under the agreement, Paramount will acquire about 115,000 (65,000 net) acres of undeveloped land, valued at $30 million (Can.) by Paramount, of which 48,000 (24,000 net) acres is in proximity to Paramount's Karr-Gold Creek project. Paramount also will acquire 850 boe of production proved and probable reserves of 3.35 million boe consisting of 2.05 million boe of gas and 1.30 million bbl of oil and NGLs, at Dec. 31, 2009.

Paramount has now consolidated 99,000 (74,000 net) acres of land at Karr-Gold Creek, providing an inventory of more than 200 drilling locations in both sour and sweet, liquids-rich tight gas reservoirs.

As part of the agreement, expected to close at the end of June, Paramount also will assume Redcliffe's $12.5 million (Can.) of net debt.

In March, Paramount announced plans to drill as many as eight operated oil wells in the Cameron Hills field area of Canada’s Northwest Territories in 2010 (OGJ Online, Mar. 11, 2010).

In 2008, Redcliffe tested a Triassic Halfway sour oil and gas discovery at Wapiti in the Peace River arch area of west-central Alberta (OGJ Online, Mar. 17, 2008).

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