NuVista Energy Ltd. Announces Property Acquisition
CALGARY, ALBERTA--(CCNMatthews - March 8, 2007) - NuVista Energy Ltd. (TSX:NVA) ("NuVista") is pleased to announce that it has entered into an agreement to acquire certain natural gas properties located in our Central Alberta core area. The acquisition cost, payable in cash, for these assets is approximately $34 million after closing adjustments. The acquisition has an effective date of January 1, 2007 and an expected closing date of April 2, 2007. The completion of the acquisition is subject to customary conditions.
This asset purchase will be part of NuVista's previously announced 2007 capital budget of $160 million, which includes an acquisition component. Current production from the acquired properties is approximately 800 boe/d, with an 85% natural gas weighting. The acquired production will be operated by NuVista with high working interests. NuVista plans to optimize the existing production facility and drill three additional wells on the property by year end. At December 31, 2006, proven plus probable reserves were estimated by GLJ Petroleum Consultants to be 2.5 million barrels of oil equivalent (boe). Reserve acquisition costs on a proven plus probable basis, including future capital, are approximately $14.75 per boe. NuVista intends to continue to pursue accretive tuck-in acquisitions in our existing core areas and will consider expanding our capital program if the acquisition environment presents opportunities that meet our criteria.
The acquisition will be financed with bank borrowings and cash flow from operations, as part of NuVista's overall 2007 capital expenditure budget. In connection with this acquisition, NuVista has agreed with its lenders to amend its bank loan facility to increase the maximum availability to $210 million. NuVista has also increased its natural gas price risk management position to 20,000 gj's/d for the April to October 2007 period by entering into AECO natural gas price costless collars at an average price of $7.38/gj to $8.00/gj.
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.