Yesterday, Crew Energy Inc. formally notified Terra Energy Corp. that it would exercise its option of purchasing the $20 million package of Montney assets.
Under the terms of an Additional Option, Terra Energy Corp. granted Crew the option to acquire the balance of its Montney assets, located in Northeast B.C., for a price of $36 million.
That price may consist of any combination of cash or Crew Energy shares, but must include a minimum cash component of $10 million and must be exercised before June 3, 2013.
Following the February 28 transaction, Terra Energy continues to hold close to 80 net sections of high prospective Montney lands in the Farrell Creek/Altares, Hudson and Mica areas of Northeast B.C.
Net proceeds from the sale will be utilized by Terra Energy Corp. to reduce their bank facility from $70 million to $51.5 million, with a further reduction set to take place by March 31, 2012 to $49.9 million.