November 24, 2010 / 2:32 PM / in 7 years

UPDATE 1-Pace Oil buys oil-weighted Alberta assets for C$52 mln

* Says to raise C$55 mln in bought deal

* Sees 2011 production between 15,000-16,000 boe/d.

Nov 24 (Reuters) - Pace Oil & Gas Ltd PCE.TO said it will buy certain oil weighted assets for C$52 million to solidify its position in Alberta.

The company said the new assets are currently producing 1,350 barrels of oil equivalent per day (boe/d), which has 41 percent oil.

The Canadian company said it will acquire 100 percent interest in a keyhole section of its existing waterflood in Dixonville, which is in north-western Alberta.

It will also consolidate additional surrounding lands and associated infrastructure.

Alberta-based Pace Oil was formed when upstream business of Provident Energy Trust PVE_u.TO merged with Midnight Oil Exploration Ltd’s oil and gas business in April. [ID:nSGE63J0GO]

In Enchant area, the company will consolidate a portion of its existing interests and increase its share of oil pools and have higher exposure to its Glauconitic lithic channel play.

The company, which would raise C$55 million through a bought deal, said it will initially fund the deal through its existing lines of credit.

Pace Oil expects to close the acquisition in mid-December.

The company also increased its 2011 capital program by C$10 million to C$100 million and said it expects 2011 production to range between 15,000 boe/d and 16,000 boe/d.

Shares of the company closed at C$8.12 on Tuesday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Vyas Mohan) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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