NEW YORK, NY -- (Marketwire) -- 02/14/12 -- The Peace River Arch is home to Storm Resources (TSX VENTURE: SRX), Bellamont Exploration (TSX VENTURE: BMX.A), Birchcliff Energy (TSX: BIR) and Aroway Energy (TSX VENTURE: ARW). The Peace River Arch in Alberta, Canada is recognized by industry as having a history of high quality reserves and continues to be a highly competitive area. As 2012 begins, companies in the area are aggressively pursuing land acquisitions while increasing drilling programs and facilitating potential mergers and acquisitions. The Arch offers significant opportunities for the recovery of new and remaining oil and gas reserves. Due to the Arch's impressive geologic and geographic diversity, success is rewarded with prolific oil and natural gas production that can be both sweet and rich in natural gas liquids.
Storm Resources Ltd. recently announced its acquisition of Bellamont Exploration Ltd. As per the transaction, Storm is acquiring operated, high working interest assets primarily located in the Grand Prairie area and the Peace River Arch of Alberta with current production of approximately 2,200/boed (48% crude oil and 52% natural gas). At the time of acquisition, Bellamont was reporting an operating net back of $28.57/fboe with total proved reserves of 6,405 Mboe of which 42% is oil.
One of the fastest growing juniors in the Peace River Arch area, Aroway Energy, reported production numbers of 669/boed at the end of 2011 of which 75% was oil. The company recently reported cash flow from operations netback of $41.93/fboe and just last week, Aroway announced it has increased its 3D seismic coverage in its core acreage of the Peace River Arch on an approximate 55 square kilometers of Company lands recently acquired at crown land sales and through acquisitions. This seismic shoot will add to Aroway's drilling prospect inventory which often results in companies paying a healthy premium when acquiring junior explorers.
Birchcliff Energy Ltd. is the largest producer of oil within the Peace River Arch area. The company is currently trading at the premium price of $116,000/fboe which is a 33% premium to its peers in the area that have experienced a merger and acquisition since the start of 2012. Currently of the 7 acquisitions that have occurred in Canada in 2012, the average value on a per flowing barrel basis is $80,208. Aroway Energy could hold the most upside trading significantly lower than its peers at $65,000/fboe.
With so much activity occurring in the Peace River Arch, majors could look to facilitate more acquisition attempts in 2012. Last year, ATB Corporate Financial Services reported the number of Canadian Mergers and Acquisitions was 121, and of the 7 that have occurred in 2012 to date, 4 have occurred within Alberta near the Peace River Arch.
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