UPDATE 3-Canada's TORC Oil & Gas to buy Surge Energy assets for C$430 mln
(Confirms Surge sold the assets to TORC, updates share prices)
By Nia Williams
April 27 (Reuters) - Canadian intermediate producer TORC Oil & Gas Ltd is buying light oil assets from Surge Energy Inc in the Canadian Bakken region of southeast Saskatchewan and Manitoba for C$430 million ($354 million), Surge said on Monday.
Calgary-based TORC said in a statement it would acquire the assets from an independent Canadian oil producer. Junior energy company Surge later confirmed it is the seller.
The assets have production capacity of 4,750 barrels of oil equivalent per day (boepd), of which 98 percent is light oil and the rest liquids.
TORC, which has a market value of C$1.21 billion, also raised its 2015 average production forecast to more than 15,400 boepd from 13,000 boepd.
Darrell Bishop, head of energy research at Haywood Securities, said he expected to see more deals in the Canadian energy sector as many companies struggle with oil prices that have slumped by nearly half since June last year.
"The premium go-to names within this space are utilizing their balance sheets and cost of capital to take advantage of asset deals that would probably not normally be available," Bishop said. "They are low decline, free-flowing top assets."
TORC said it had identified about 170 net high quality light-oil drilling locations on the acquired assets, which have total proved reserves of 12.5 million barrels of oil equivalent. The company's light oil and liquids concentration will rise to 89 percent from 86 percent as a result. Continued...