Manitok Energy Inc. (
TSX: V.MEI,
Stock Forum) said Wednesday it has closed on the second and final tranche of a previously announced equity financing that raised $16.8 million.
The Calgary-based company also said it has completed the acquisition of certain petroleum and natural gas assets in the Wayne are of southeast Alberta for a total cash consideration of $61.5 million prior to transaction costs and customary closing adjustments.
The Wayne acquisition, coupled with the equity offering, is accretive to shareholders,
Manitok said in a press release.
On Wednesday, Manitok shares eased 2.4% to 80 cents, leaving a market cap of $61.6 million, based on 77 million shares outstanding. The 52-week range is $3.19 and 62 cents.
Here are the details
The private placement was comprised of a combination of common shares priced at 80 cents, and common shares issued on a flow through basis, priced at 85 cents and 95 cents.
After announcing the $6.6 million final tranche, the company said it closed on approximately $16.8 million (about 19.8 million common shares) of gross proceeds pursuant to the offering.
Highlights of the Wayne Acquisition
As a result of the Wayne acquisition, Manitok’s total oil production in the immediate area surrounding its lands is the second highest next to
Cenovus Energy Inc. (
TSX: T.CVE,
Stock Forum). The critical mass in production, together with the oil treating facility and large land position, provides Manitok with a strong competitive position in the area.
Manitok acquired a 100% working interest in a 25,000 barrels per-day oil treatment facility, which is directly tied into the Inter Pipeline Fund Central Alberta Pipeline, and is currently designed to transport 6,600 barrels of clean oil.
There is an 8 billion cubic feet per day gas plant associated with the Wayne facility that can be expanded by the addition of compression to over 20 billion cubic feet per day. The facility has the capacity to dispose of 26,000 barrels per day of water and has acid gas disposal capacity of 4.4 billion cubic feet per day that can be expanded to 15 billion cubic feet per day.
The Wayne facility is the largest oil treatment facility in the area and provides Manitok with greater control over its production timing and operating costs. Manitok will also focus on increasing third-party volumes through the facility to maximize oil handling and processing fee revenue.
Manitok said it has significantly increased its leverage to a community price recovery, considering the assets were purchased at a significant commodity price low.
Financial Update
For the remainder of 2015, Manitok has hedged 2,000 barrels per day of crude oil at an average of $89.92 (CAD WTI) and has 1,000 barrels per day of crude oil at an average price of $79.95 for 2016 and 500 barrels per day of crude at an average of $79.75 for 2017.
FULL DISCLOSURE: Manitok Energy is a client of Stockhouse Publishing.