Toro Oil & Gas Ltd. (Toronto Venture: TOO) has entered into a definitive purchase and sale agreement to acquire high quality, low decline, light crude oil producing assets located in east central Alberta from an arm’s length oil and gas producer.

The current production of the assets is approximately 400 boe/d, all from the Viking formation with potential for considerable light oil growth. Total consideration paid for the assets is approximately C$25 million, of which C$22.5 million will be paid in cash and the issuance of 29,797,378 pre-consolidated common shares of Toro, subject to normal adjustments based on an October 1, 2014 effective date. The closing of the acquisition is subject to customary conditions, including approval of the TSX Venture Exchange, and is expected to close on or about December 19, 2014.

The acquisition consists of an operated, 100% working interest, largely unitized, low decline, crude oil property located in the Provost area of east central Alberta. The assets to be acquired contain large oil-in-place estimates with high light oil and gas net back production. The assets include more than 60 net sections of land, of which greater than 78% of that acreage has been contributed to a legacy unit. The assets have conventionally produced over 16 million barrels of oil to date and has been conventionally drilled thus far on a vertical basis at 320 acre well spacings. Through recent advancements in drilling and completion technologies, the company anticipates to increase production and recovery factors over time, of which only 5% has been recovered to date. The company has identified over 100 low risk drilling locations on the Assets and believes there is significant long term upside through the application of horizontal drilling, multi-stage fracture stimulations and the re-activation of the waterflood on the assets.


Upon closing of the acquisition, Toro will own 93 net sections of producing and highly prospective Viking acreage which it believes provides an anchor position in one of the company’s intended core areas.