Published: May 21, 2018 |

Canuc Resources has signed a letter of intent (LOI) to acquire Ontario Corporation’s subsidiary Full Circle Energy.

Full Circle’s principal corporate assets consist of 6 sections of undeveloped oil prospective acreage in southwest Saskatchewan, and a Farmin agreement that references a further 6.3 contiguous sections of adjacent land.

Full Circle’s Farmin agreement considers drilling a well to earn a 100 percent working interest (WI) in 1.5 sections of land. An additional 4.8 sections make up an Area of Mutual Interest (AMI). The AMI lands can be developed 75 percent/25 percent in favor of Canuc.

Canuc will acquire Full Circle on a share exchange basis with a valuation which will be determined by an Independent Consulting (Petroleum) Engineer. Seismic surveys and subsurface geological mapping on the sections held by Full Circle indicate potential for the Upper Shaunavon formation, a well-known oil producing horizon in this area.

The Shaunavon stretches over a distance of 40 miles in a northeast-southwest direction and at its northern end to date has yielded a total of 4.4 million barrels of oil. Full Circle’s lands are at the south end of this trend and offset a well that produced a total output of 125,000 barrels.

The Company believes that the acquisition represents a great opportunity to enhance existing cash flow from oil and gas operations. The opportunity is de-risked by offsetting production at an existing well while commercial risk can be further reduced by offtake avenues already identified.

The situation represents an opportunistic acquisition prospect that can be highly accretive to shareholder value. Year round access to producible acreage can be secured in the oil industry friendly jurisdiction of Saskatchewan, Canada.

Management is of the opinion that this opportunity represents an important step in the pursuit of cost competitive assets with the potential to provide significant cash flow.
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This will enable the Company to continue to develop current assets, and to potentially acquire further assets in the natural resource space. Canuc intends to drill the first well in the next six months. Further wells will be commenced or spudded shortly thereafter pending results of the first well.

Source: Compelo

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