PROPERTY ACQUISITION / Tusk Energy Increases Stake in Meekwap Area
CALGARY, ALBERTA--TUSK has agreed to acquire additional Unit
interests and has also increased its working interest in
exploratory lands in the Meekwap area. In addition, the Company
has commenced a 3-D seismic survey and is preparing to spud
another Meekwap area well in the next few days.
Two participants in the Meekwap D-2A Unit have agreed to sell
their interests in the Unit and adjacent lands. TUSK has
committed to 60 percent of the interests and the remaining 40
percent has been committed to a private oil and gas company at
arm's length to TUSK. The interests to be purchased by TUSK
include a 9.32 percent Unit participating interest and similar
interests in certain undeveloped lands in the area. The purchase
is partially subject to rights of first refusal in favour of TUSK
and certain other Unit participants. Both acquisitions are
expected to close prior to the end of the year. Based upon
October's average production for the Unit and assuming no rights
of first refusal are exercised, the purchase would increase the
production base of TUSK by approximately 30 percent.
TUSK's net production during the third quarter averaged 832 boepd
and annualized cash flow based upon that period was $3,138,000.
The Company currently has 10,466,584 common shares issued and
outstanding. As of the end of the third quarter debt/cash flow
ratio was less than 1.5x.
Meekwap is the Company's primary producing area, representing 90
percent of TUSK's current overall production prior to the proposed
transaction. TUSK is the operator of the Meekwap D-2A Unit.
Earlier this year, the Company drilled two successful wells within
the confines of the Meekwap Unit based upon anomalies defined by
3-D seismic (September 1, 1998 news release). A third well, to be
drilled on a separate anomaly defined by the same seismic survey,
will spud this week.
TUSK has increased its working interest (up to 72 percent) in
certain exploratory lands in the immediate area of the Meekwap
Unit. A 3-D seismic survey is currently being shot over these
lands. |
