Storm Cat Energy
agreed to buy some oil and gas leases in Van Buren, Searcy and Pope Counties, Ark.
Terms weren't disclosed, but the Vancouver-based energy company said the land is undeveloped and contains 20,000 gross and 16,000 net mineral acres.
Pending the satisfactory completion of due diligence review, the transaction is due to occur by mid-April.
Storm Cat, which focuses on the exploration and development of large unconventional gas reserves from fractured shales, coal beds and tight sand formations, said the purchase is located in the Fayetteville shale play in the Arkoma Basin of northwest Arkansas.
"By our initial evaluation, we anticipate estimated ultimate recoveries of 1.0 Bcfe to 1.4 Bcfe per horizontal well with an average cost to drill and complete of $1.6 million," said President Scott Zimmerman. "These are attractive finding costs, even with higher service costs of drilling these horizontal wells. This position provides us with over 120 net drillable locations. By developing these properties in a timely fashion, we anticipate adding to the cash flow provided by our Powder River Basin properties while we continue to unlock the vast resource potential that exists in our Elk Valley play in British Columbia."
Early Tuesday, Storm Cat shares rose a dime to $3.33.