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.