NuVista Energy Ltd. Announces Completion of Strategic Property Acquisition
CALGARY, ALBERTA--(CCNMatthews - Aug. 4, 2005) - NuVista Energy Ltd. (TSX:NVA) ("NuVista") is pleased to announce that it has successfully closed its previously announced acquisition of certain natural gas properties concentrated in northwestern Saskatchewan. The acquisition cost, payable in cash for these assets, was approximately $150 million. The acquisition is consistent with NuVista's strategy of acquiring low cost, operated properties with infrastructure, undeveloped land and significant lower-risk development potential. With this acquisition, NuVista continues to improve the quality of its production and increases its overall natural gas exposure. The assets establish a new core region for NuVista in northwest Saskatchewan and contain production of approximately 20.4 mmcf per day of natural gas (3,400 barrels of oil equivalent per day ("boe/d")). This production is 90% operated, with an average working interest of 65%. This transaction increases NuVista's current production by 44% to over 11,200 boe/d. These assets include approximately 175,000 net acres of land, of which 78,500 net acres is undeveloped. NuVista has currently identified approximately 50 drilling locations and 30 recompletions/workovers on the assets.
The cash to close the acquisition, approximately $150 million, was funded through a combination of bank debt and an issuance of subscription receipts ("Subscription Receipts"). In conjunction with the acquisition, NuVista agreed with its current lenders to increase NuVista's maximum borrowing amount to $130 million. In addition, NuVista issued 7.5 million Subscription Receipts at a price of $13.60 per Subscription Receipt for gross proceeds of approximately $102 million. Each Subscription Receipt will be deemed to have been converted into one common share of NuVista at 11:59 p.m. on August 5, 2005 in accordance with their terms and the transfer register for the Subscription Receipts will be closed at 4:30 p.m. local on August 5, 2005. An insider of NuVista will receive 40,000 common shares of NuVista in connection with the conversion of 40,000 Subscription Receipts acquired by the insider on closing of the equity financing.
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NuVista Energy Ltd. is a natural gas weighted independent Canadian oil and natural gas exploration, development and production company created through the reorganization of Bonavista Petroleum Ltd. on July 2, 2003. NuVista's common shares trade on the Toronto Stock Exchange under the symbol NVA.