Rubellite Energy to acquire Clearwater assets for C$34m in Northeast Alberta

In an impressive move that broadens its operational horizon, Rubellite Energy Inc. has locked in a definitive agreement to acquire additional Clearwater assets. This acquisition encompasses assets within the Figure Lake and Edwand regions, and undeveloped lands in the Nixon area of northeast Alberta.

Detailed Acquisition Insights

The deal, set at a robust $34.0 million purchase price, is projected to close in early November 2023. It includes approximately 800 bbl/d of conventional heavy oil sales production and 215 net sections of the Southern Clearwater play trend land. Rubellite will fund this acquisition through its extended credit facility. The transaction boasts a string of strategic highlights:

• An addition of roughly 800 bbl/d in conventional heavy oil sales production.
• 107 net sections of promising acreage, with 96 net sections undeveloped, complementing Rubellite’s existing land holdings in the Figure Lake area.
• In the same region, 49 high-grade drilling locations are set, 25 of which are already earmarked for development, offering instant flexibility for Rubellite’s drilling schedule.
• Additionally, 108 net sections of exploratory undeveloped land in the Nixon area, around 80 kilometers north of Figure Lake, have been secured.

Strategic Acquisition Rationale

This acquisition fortifies Rubellite’s growth plan in the Clearwater sector, promising high netback heavy oil base production, extensive high-grade development opportunities, and valuable exploratory ventures. This move:

• Bolsters Rubellite’s stature in the Southern Clearwater zone, hiking the base production by over 20%.
• Augments Rubellite’s operating synergies in the extensive Figure Lake land area.
• Provides an enhanced funds flow, paving the way for rapid organic growth and facilitating exploration endeavors.

Credit Facility and Expansion

Concurrent with the acquisition closure, Rubellite’s credit facility will rise to $60.0 million, from the current $40.0 million. By December 31, 2024, this facility will gradually reduce to $40 million, with the initial term ending on May 31, 2024. After the acquisition wraps up in early November, the company forecasts a draw of approximately $40 million on its credit facility.

Operations Update and Forward Look

Rubellite’s third quarter of 2023 witnessed an average conventional heavy oil sales production of 3,154 bbl/d, and a production surge to 3,577 bbl/d as of mid-October. With the ongoing developments in the Figure Lake area and a promising drilling schedule, Rubellite looks set to strengthen its presence in the oil exploration and development sector.

In their Northern Exploration area, Rubellite plans to enhance its operations by drilling additional wells. However, certain activities are pushed to 2024 due to access constraints. The company remains optimistic about the upcoming developments and continues to focus on its strategic growth plans in the Clearwater domain.