Petra Petroleum Inc. (
TSX: V.PTL,
Stock Forum) announced that the corporation has entered into a Letter of Intent (LOI) with, privately held, Grail Hydrocarbon Canada Ltd. in respect of an opportunity to acquire a 75% participating interest in a crown lease in the Strome Field area of Alberta, Canada.
The lease encompasses an abandoned Lower Mannville Ellerslie reservoir oil pool and the corporation's evaluation of the project area suggests the presence of a commercially-attractive recoverable volume of by-passed oil.
According to the
Petra Petroleum press release, a large number of other oil pools with significant remaining recoverable oil volumes also exist in the general area.
"Our low-cost entry into an under-valued oil producing area of Alberta represents a step change in our quest to build a sustainable exploration and production company,” said Robert Lambert, President and CEO. “We are also delighted to participate in this venture with a highly experienced management team at Grail and we look forward to working with them to identify further opportunities in the near future."
The timing of the acquisition is dependent on satisfactory completion of further definitive transactional documentation, including a sale and purchase agreement, as well as final detailed due diligence, regulatory approval and board approval from both parties.
Petra is a Canadian-based oil and gas exploration and development company with a focus on emerging and under-explored basins.
On Tuesday, Petra was trading at $0.345 a share. The company had a market cap of $24.1 million, based on 69.7 million shares outstanding.