IN THE NEWS / Questar Energy Resources Announces Canadian Acquisition
Questar Announces Canadian Acquisition
SALT LAKE CITY, Dec. 18 -- Celsius Energy Resources Ltd., a wholly owned subsidiary of Questar Corp. (NYSE: STR), announced the acquisition of oil and gas assets in northeast British Columbia from Reserve Royalty Corp. for $3.1 million ($4.75 million Canadian).
The transaction -- which has an effective date of Sept. 1, 1998 -- added approximately 4.8 billion cubic feet equivalent of proved reserves at a cost of $.64 (U.S.) per Mcfe, or $.98 per Mcfe Canadian. Celsius officials said an estimated 95% of the reserves are classified as proved developed producing. The reserves, which are 90% gas, will increase Questar's Canadian reserve base by about 15%.
The acquired properties are located in the Cecil Lake, Donis, East Clark Lake, Martin, Oak, Red Creek, Sikanni, Silver and Taylor Flat areas. There are currently 24 oil and gas wells on the properties. The company anticipates that development of 32 sections of undeveloped land included in the transaction will add at least 10 wells. The acquisition also included approximately 133 kilometers of proprietary seismic data and working interest in numerous gas gathering and processing facilities.
Approximately 70% of the projected 1999 gas production from the currently producing wells has been hedged at a net point-of-sale price of $1.65 per MMbtu (U.S.), or $2.50 per MMbtu (Canadian).
Gary L. Nordloh, president and chief executive officer of Questar's exploration and production subsidiaries, said the acquisition is consistent with the company's strategy to expand activities in Canada.
Questar Corp. is a $2 billion integrated energy resources and services company based in Salt Lake City. Through subsidiaries, it engages in energy development and production; gas gathering and processing; wholesale gas, electricity and liquids trading; retail energy services; interstate gas transmission and storage; retail gas distribution; and information systems and technologies.
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