Park Place Energy Inc. previously announced it had entered into an agreement to purchase three oil and gas exploration and production companies operating in Turkey. The "Tiway Companies" own interests in 3 producing oil and gas fields, one offshore and two onshore. The Tiway Companies report that year to date, production has averaged 434 BOE/D (barrels of oil equivalent per day). Approximately 75% of the production is gas (selling at above $7 per mcf) and 25% of the production is oil (selling at a slight discount to Brett).
The effective date of the purchase is January 1, 2016. The purchase price is $2.1 million and Park Place paid a deposit of $500,000 when the agreement was signed in December. Closing of the transaction is conditional on Park Place obtaining approvals from two Turkish regulatory agencies. One of approvals has been received; it is anticipated the other approval will be received in July. Park Place expects to close the acquisition following receipt of the second approval.
The Company's focus in the acquisition is the offshore gas field called the South Akcakoca Sub-Basin located in the Black Sea where the Tiway Companies own a 36.75% working interest. Based on the large amount of research and investigation of the field, the Company believes there are substantial behind pipe reserves which can be accessed through a low cost work program. It is anticipated such work program will dramatically improve production. The Tiway Companies, with input from the Company, have been working with the operator to develop plans to commence this work program later this year.
Additionally, the Company has identified a number of proved undeveloped locations in the offshore gas field which can be drilled from the four existing production platforms. Accordingly, the Company believes there is the potential to produce substantial additional volumes of gas through the existing infrastructure.
Source: Park Place Energy Inc.
Date: Jun 17, 2016