The cash component of the acquisition was funded out of existing cash reserves and will bring Xstate’s total working interest to 25 per cent.
The Red Earth asset consists of six oilfields and associated infrastructure, located 450 kilometres north of Edmonton.
The company says the Red Earth properties are producing around one thousand barrels of oil per day and have a reserve of 2.5 million barrels of oil. The additional acquisition means the Xstate share of current production is 250 barrels of oil per day.
The acquisition delivers a blended purchase metric for 25 per cent working interest of C$5279 (approximately A$5456.16) per flowing barrel.
"We are pleased to acquire a further 10 per cent working interest in the Red Earth properties," said Xstate Managing Director, David McArthur.
"These assets have significant upside, and we will begin the task of increasing production in April 2021."
Be patient, the increase in stake in Blue Sky will provide fruit and so will the successful drill results and flow and commercialisation from Borba... Be patient
Food for thought, that's over $1.2 mill per day in revenue, won't be long before we blow 88e of the map
