Eternal eyes drilling via Zavanna purchase

Sept. 1, 2006
Eternal Energy Corp., Littleton, Colo., might drill as many as eight wells within 18 months on acreage in Alberta it would acquire by buying the Canadian subsidiary of Zavanna LLC, Denver.

By OGJ editors
HOUSTON, Sept. 1 -- Eternal Energy Corp., Littleton, Colo., might drill as many as eight wells within 18 months on acreage in Alberta it would acquire by buying the Canadian subsidiary of Zavanna LLC, Denver.

Eternal entered a letter agreement to buy Zavanna Canada Corp. for $11.125 million (Can.). The price will be $1 million lower if cash flow from the Zavanna properties doesn't rise to targeted levels through next June.

Zavanna Canada owns oil and gas leases, overriding royalty interests, production, equipment, and contract rights in Alberta.

Average gross monthly production from the Zavanna properties is 93.5 MMcf of natural gas, 2,964 bbl of condensate, and 3,039 bbl of liquids.

Drilling on the acquired properties would be of development wells, Eternal said.