Painted Pony Petroleum Ltd. announced yesterday that it will be acquiring UGR Blair Creek Ltd., a subsidiary of Unconventional Resources Canada, in a stock deal worth roughly $276 million.
The deal will involve $229 million dollars in Painted Pony shares, while the company will also take on UGR’s $47 million in debt.
UGR operates high working interest Montney assets with established production, infrastructure and land holdings jointly with and adjacent to Painted Pony’s assets in northeast British Columbia.
Painted Pony also announced that it is seeking nearly $101 million in equity financing both to pay down bank debts, and to spend on drilling.
The acquisition means that the Calgary-based company will increase its acreage in the Montney region by 52 percent. According to a release from the company, the acquisition increases Painted Pony’s forecast 2017 average daily production by 12% to approximately 290 million cubic feet per day. UGR’s assets will add 155 million cubic feet/day in gas processing capacity, of which 105 million cubic feet/day is currently unutilized by UGR, along with 106 million cubic feet/day in capacity on Enbridge’s pipeline system in the area.