CALGARY — Fast-growing oil junior Raging River Exploration Inc. said Tuesday it will buy two private companies and an asset package for $65 million to increase its stake in the increasingly popular Saskatchewan Viking play.
The Calgary company also announced a bought deal financing where it would issue 21 million shares to a consortium of underwriters at $2.65 each for gross proceeds of $56 million — but upsized the deal within hours due to demand to 26 million shares for $69 million.
“The key message we’ve been giving to the investment community and our investors is that we’re going to stay focused on the greater Kindersley or greater Dodsland area map sheet. It’s right in our backyard, the same stuff we’ve been doing,” said president and chief executive Neil Roszell.
The Dodsland Viking lands have been the epicentre of a series of property acquisitions over the past several months, including the $180-million sale of assets by Long Run Exploration Ltd. to Teine Energy Ltd., a private company backed by the Canada Pension Plan, announced Nov. 15. Teine also bought land there from Baytex Energy Corp. late last year.
Last week, Novus Energy Inc. said it had formed a committee to look at strategic alternatives — essentially putting itself up for sale — because of “the significant amount of industry interest and recent activity in the company’s (Dodsland) Viking oil core area.”
Roszell said his company will use the extra money it is raising to continue to consolidate Viking assets. Its business plan is to grow over two or three years and gain enough size to attract a bigger buyer.
“I think there are going to be more assets placed on the market for guys that need capital,” he said.
“We’ve seen about 3,000 bpd sold in the Viking in the last several months and Novus would be another 3,000 bpd. We could see 5,000 bpd sold in the next couple of months.”
The private companies sold to Raging River were Cirdan Resources and its 50 per cent partner, a Saskatchewan numbered company. The asset deal was with a senior energy producer whose name is not being released, Roszell said.
The acquisitions will add 630 barrels per day of light oil production and boost the company’s expected exit output to 3,700 barrels of oil equivalent per day (97 per cent light oil), it said.
Raging River also said its borrowing base is being increased to $100 million from $65 million, providing more capital for growth.
The company was created in March from assets not included in the sale of Wild Stream Exploration Inc. to Crescent Point Energy Corp.
It recently raised its exit goal to 3,000 bpd after reaching the previous target of 2,800 bpd in October.
On Tuesday its shares closed up five cents at $2.75. They have traded between $1.40 and $2.84.
dhealing@calgaryherald.com