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Manitok Energy Inc., Calgary, has entered an agreement with an undisclosed seller for the purchase natural gas processing and production assets in the Carseland area of its conventional oil and gas reservoirs in southeast Alberta’s Entice lands.

In addition to a 14-MMcfd natural gas processing plant, Manitok will buy about 450 mcfd net—or 75 boe/d net—of natural gas production, related gathering systems, 100% working interest in 5,760 acres of undeveloped land, as well as an 11-m sales gas line tied into the ATCO south sales system, the company said.

Part of Manitok's strategy to decrease its reliance on third-party facilities, the acquisition involves a total cash consideration $4.75 million prior to customary final adjustments and is scheduled to close on or about Mar. 4.

The planned purchase will enable Manitok to execute minor modifications to the existing processing plant’s inability to adequately handle NGLs present in production from the company’s Lithic Glauc wells, which, to date, has resulted in restricted output from the wells, according to Manitok.

The plant modifications additionally will allow Manitok to tie in two additional wells on pad site 03-16-023-25W4M in Entice’s Basal Quartz drilling location, the company said.

Manitok, which has identified another 4-6 potential drilling locations on the Lithic Glauc lands, plans to complete proposed modifications at the gas processing plant during second-quarter 2016.

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