Major Oil and Gas Properties
Novitas Energy Ltd. has entered into agreements to purchase producing properties located primarily in the Province of Saskatchewan. In addition, in a separate transaction, Novitas has acquired interests in several non-producing properties.
Novitas purchased approximately 480 barrels of oil equivalent per day (boe/d) from two private related companies for approximately $9,200,000. Proved producing reserves of 2,800,000 boe's (10:1), consisting of 95 percent oil and 5 percent natural gas, have been assigned to the properties by management. No value has been attributed to probable reserves at this time. Approximately 430 boe/d of 22o API crude oil is produced from mainly 93 percent owned properties in the Shaunavon area of southwest Saskatchewan. The remaining 50 boe/d of production comes from small interests in numerous wells located mainly in the Province of Alberta. Novitas will be assessing the Shaunavon property to determine the potential for increasing production by infill drilling, waterflooding, which has been successful in this area, and by reworking existing producing wells. An aggressive review of operating costs will also be undertaken.
Novitas has also acquired a 100 percent working interest in five sections of land in a recent Crown land sale for $360,000. These lands contain multi-zone shallow natural gas prospects. Programs will commence to evaluate these properties as soon as possible.
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