Calima Energy Limited advises that following the successful completion of the takeovers of TSV Montney Ltd. and TMK Montney Ltd., the company will own a 100% working interest in 72,000 acres of drilling rights in British Columbia considered to be prospective for the Montney Formation. As a result, the Farm-in Agreement between the Company and TSVM and TMKM has become redundant and the agreement will be concluded.As advised on 1 May 2018, the purpose of the takeover transaction was to consolidate ownership of the Montney Project, with the key benefits including, but not limited to:
- Consolidation of a 100% interest in a single entity is likely to attract greater market interest;
- The enhanced structure will likely provide improved access to capital to fund the forward work program and removes any risk associated with TSVM and/or TMKM funding its share of development costs;
- Removes any potential impediments or misalignment of separate JV interests; and
- Additional synergies include the removal of duplicated technical and administrative costs.
The Company is also pleased to advise that Mark Freeman, who has previously provided management services to TSVM and has extensive corporate experience in Canada, will be joining the Calima Team. Freeman is a Chartered Accountant with more than 20 years' experience in corporate finance and the resources industry. He has considerable experience in strategic planning, business development, mergers, acquisitions and project management. Freeman has worked with a number of successful public resource companies and since 2015 has been providing strategic advice to TSVM. A graduate of the University of Western Australia with a Bachelor of Commerce, Freeman also holds a Graduate Diploma in Applied Finance from the Securities Institute of Australia. Freeman will take responsibility for merger integration and also business development for the enlarged group. Freeman was recently interviewed at the Noosa Exploration and Development conference. A copy of the interview is available via the Company's website.
Calima's Managing Director, Alan Stein, commented: "The merger has been a very successful outcome for the Company and we now look forward to the drilling campaign which will commence before the end of the year. The Montney is continuing to see ongoing significant and substantial investment. Over 350 horizontal Montney wells were drilled in the first quarter of this year and M&A valuations for early stage acreage have increased from an average of $2,500 per acre last year to $4,500 for the first half of this year. With an acreage position of 72,000 acres the Company has been fortunate to establish a significant land position in a world class hydrocarbon province."