Fremont to expand Pathfinder oil & gas field by 21% with 5,990 acres acquisition
SYDNEY: Fremont Petroleum Corporation has agreed to acquire a highly prospective oil & gas field covering 5,990 acres that is contiguous to its existing Pathfinder Property in Fremont County, Colorado.
This value accretive acquisition expands the Pathfinder Oil & Gas Field by 21% to 25,995 acres. At this surface size, the property can accommodate up to 650 wells at 40 acre spacing. Fremont is the operator of the property and controls a 100% working interest giving it full control of costs and optionality over future field development.
Terms of the acquisition are confidential, however the Company confirms that is has negotiated a competitive royalty arrangement and a minimal up-front cash payment. Given the Company’s existing large land position in Fremont County, it was deemed to be the logical acquirer of the field.
The transaction is expected to be concluded this year. Approximately 61% of the acreage has existing 3D seismic coverage which adds substantial value to the property and gives Fremont’s team access to some compelling geology for immediate assessment for high value drill locations. As well, the Company will engage independent consultants Gustavson Associates to complete an independent Reserves and Resources report over the property which will be combined with future updates.
Large, contiguous quality oil and gas properties with a 100% working interest and operatorship are highly desirable in North America. As advised, Pathfinder has been independently confirmed as an extension of the prolific DJ Basin in Colorado with highly quality contiguous properties selling for as high as USD$16,000/acre.
Company also notes that it will not be renewing a 1,660 acre block that falls outside the core geologic area of interest and is not contiguous to the rest of the property.
Managing Director Tim hart said: “The acreage adds considerable value to Fremont and the terms are most favourable. We are focused solely on the growth and development of the Pathfinder Field and progressively increasing its value through drilling, shooting or acquiring top quality 3D seismic, and growing the footprint contiguously. With over 640 well locations, we become that much more valuable and appealing to third parties that have expressed an interest in developing the field more aggressively.
“We expect to close this acquisition by the end of this calendar year and before this time we anticipate delivering on a number of considerably value accretive events. An immediate focus is bringing the Vespucci well into permanent production, kicking off our three-well Pierre Formation drill campaign, updating our Reserves & Resources based on the current 21,000 acre property, and closing out our first gas offtake agreement.”