Cavell Energy Corp. has bought a natural gas plant, three potential gas wells and five sections of land in west-central Saskatchewan as part of its aggressive drilling program in the area, the junior energy company said Wednesday.
The plant, currently idle, has a capacity of three million cubic feet of gas per day and will be put online by the end of August, Cavell said in a release. The seller is Acclaim Energy Inc. of Calgary, an energy trust, but financial details were not disclosed.
Calgary-based Cavell also has a partnership with Husky Energy covering 65 sections of land, where the two companies exploit the land on a rotating basis.
The oil and natural gas company wants its production in west-central Saskatchewan to reach 10 million cubic feet a day by early 2003.
Murray McCartney, Cavell's president and CEO, said the plant is ``an ideal fit" for the firm's strategy in Saskatchewan.
Earlier this year, Cavell entered into a 65-section agreement with Husky Energy, and "this recent acquisition enables us to establish the production facilities necessary to properly exploit both Husky farm-in lands and Cavell lands in the area," McCartney said.
Cavell has drilled 10 wells on the Husky lands. Overall, it plans to drill 10 to 12 more wells by year's end, with a focus on exploiting Husky assets.
Shares in Cavell rose two cents to close at $1 in Wednesday trading on the Toronto stock market, while units of Acclaim fell five cents to $4.38.