NuVista Energy Ltd. Announces Property Acquisition
CALGARY, ALBERTA--(Marketwire - Dec. 17, 2007) - NuVista Energy Ltd. (TSX:NVA) ("NuVista") is pleased to announce that it has entered into an agreement to acquire certain oil properties located in our Provost core area, in close proximity to our existing Chauvin properties. The acquisition cost, payable in cash, for these assets is approximately $24.5 million after closing adjustments. The acquisition has an effective date of October 1, 2007 and an expected closing date of January 8, 2008. The completion of the acquisition is subject to customary conditions.
The asset purchase will be part of NuVista's previously announced 2008 capital budget of $170 million to $190 million, with financial and operating results included in NuVista's results beginning on closing. Current production from the acquired properties is approximately 650 bbls/d of 23 degree API oil and is high working interest production that will be operated by Nuvista. These properties are synergistic to NuVista's Chauvin area properties which is expected to result in operating cost savings. At October 1, 2007, company interest proven plus probable reserves were estimated by GLJ Petroleum Consultants Ltd. to be 1.8 million barrels of oil equivalent (boe). Reserve acquisition costs on a proven plus probable basis including future capital, are approximately $15 per boe. Current operating netbacks are greater than $40 per boe resulting in a proven plus probable recycle ratio of greater than 2.7:1. The acquisition will be financed with bank borrowings and cash flow from operations as part of NuVista's overall 2008 capital expenditure budget.
In addition, NuVista has recently completed an expansion at our Fir production facility in our Central Alberta core area which has added 500 boe/d of net production. With this expansion, NuVista's current production is 14,800 boe per day and NuVista is on track to achieve previously announced guidance for our 2007 exit production rate of 14,750 to 15,000 boe per day and our 2008 forecast average production rate. With the closing of this acquisition, NuVista's oil and liquids weighting will increase to approximately 25% of total production.
NuVista is an independent Canadian oil and natural gas exploration, development and production company with its common shares trading on the Toronto Stock Exchange under the symbol "NVA".
Corporate information provided herein contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, which are considered reasonable by NuVista at the time of preparation, may be proven to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein and the variations may be material. There is no representation by NuVista that actual results achieved during the forecast period will be the same in whole or in part as those forecast. For the purpose of calculating unit costs, natural gas is converted to a barrel of oil equivalent ("boe") using six thousand cubic feet of natural gas equal to one barrel of oil unless otherwise stated.