BCM will acquire New Times Energy's existing production units in E. Texas in a deal worth $2.8M
Officials at BCM Energy Partners Inc., through the company's subsidiary, BCM Energy Texas LLC, have signed a purchase and sale agreement to acquire leases, wellbores, and existing production in East Texas from subsidiaries of New Times Energy Corp. (166.hk) for total consideration of $2.8 million.
Closing is expected to occur by late February, whereby BCM will pay $300,000 cash and $2.5 million in the form of a convertible note, strike price of $2.90, in exchange for 22 primary leases including 42 wells and related equipment of which 10 are producing approximately 14 bopd (barrels of oil per day). Total reserves are 187 mbo (thousands of barrels), a PV10 value of approximately $2.81 million, which BCME expects to be able to increase through new engineering and geological studies. Additionally, BCM believes that EOR (Enhanced Oil Recovery) techniques can further improve the value of this acquisition.
“This acquisition further exhibits our ability to identify and acquire off-the-radar assets that can be further enhanced through access to capital and professional management. The strike price of $2.90 per share demonstrates investor confidence in our business prospects,” states David M. Beach, president & CEO.
The East Texas Field is located in the East Texas Woodbine, Quitman, SE and Nova Fields within the North Eastern region of the State of Texas. The East Texas Field was discovered in the 1930s and covers 140,000 acres (570 km2) and parts of five counties. The property contains 30,340 historic and active oil wells and is the second largest oil field in the United States outside of Alaska. The field is also first in total volume of oil recovered since discovery. The primary productive geologic unit is the Woodbine Formation, a regional petroleum-bearing unit that has been known since the early part of the 20th century.
In August, BCM acquired assets in North Louisiana from a subsidiary of New Times Energy in exchange for $2,.72 million . Total consideration paid was $405,000 cash and a $2.31million convertible note, strike price of $2.90 per share.