Morrison Middlefield Resources Limited ("MMRL") has entered into an agreement to purchase a private oil and gas company (the "Company"). Total cost of the Company is $8.6 million which includes commitments for the drilling of one development well and for the acquisition of facilities. Closing of the acquisition is scheduled to occur on December 14, 1995 and is to have an effective date of November 1, 1995.
The Company is engaged primarily in the exploration and development of natural gas and related liquids. It produces 1,240 boe/d comprised of 7.9 mmcf/d of natural gas and 450 b/d of liquids. This production comes primarily from the Gull Lake and Bonanza areas of Alberta.
Cash flow from the Company's properties in 1996 is forecasted to be $4 million. This forecast is based on a number of assumptions including the results of drilling one development well, current prices of natural gas, natural gas liquids and oil, production levels and exchange rates. Actual cash flow from the properties may differ from the forecast.
The Company's natural gas production base will diversify MMRL's total production profile which at this time is predominantly oil. After closing this acquisition, MMRL will have total production of 5,500 boe/d. The Company will contribute approximately 8,000 net acres of undeveloped land. It also possesses tax pools totalling about $7 million, most of which are currently available for deduction.
The common shares and common share purchase warrants of MMRL are listed on The Toronto Stock Exchange under the symbols MM and MM.WT respectively.
For further information contact:
| Mr. Raymond R. Pether Chief Operating Officer (416) 362-0714 |
Mr. Walt DeBoni Vice Chairman (403) 750-3070 |
December 13, 1995