Pawnee Energy Limited (ASX: PAW) is committed to acquiring producing oil and gas properties in the Rocky Mountain region and energy infrastructure-related assets in North America and elsewhere. The Company is seeking to secure both operating and non-operating positions with reputable operators, with a view to increasing production and capacity over time by focusing its efforts on proven basins with robust and reliable production and upside, with opportunities to participate in further development programs that will be carried out by the operators in the future.
In particular, the Company is targeting robust cashflow opportunities with substantial operating margins and further production potential, with behind pipe or further field density development potential. By seeking positive cashflow with potential uplift of production through proven undeveloped acreage opportunities, the Company believes it can accrue growing production and enable increasing value for shareholders. This should provide both growing internal cashflow generation for further value-accretive acquisitions of cashflow properties, and increasing revenues to sustain the Company's continuing operations and general overheads and further energy-related initiatives over time
The Company has recently executed a Terms Sheet for the acquisition of a substantial interest in a midstream oil & gas operating asset in Alberta, Canada. The interest consists of a non-operated equity position of approx. 25% in an oil pipeline, that is transporting oil in northern Alberta over a distance of some 96 miles, on behalf of a number of oil producers in the region, including several international majors.The asset will be acquired for C$5m, representing a price of approx. five (5) times earnings, and will be cashflow positive for the Company immediately post-acquisition, and transform the Company from an oil & gas exploration company to a midstream oil & gas producer.
The Company is currently carrying out due diligence on the asset, and subject to satisfactory with same, intends to complete the transaction and execute a Purchase and Sale Agreement in the matter by mid-December 2016. Following execution of the PSA, the Company will commence work on the necessary due process to enable it to raise the monies required for completion of the acquisition and achieve re-listing of the Company by way of an IPO and issue of Prospectus.
It is anticipated the transaction will be completed in the first Quarter of Calendar 2017.