Sequoia Oil & Gas Trust, Calgary, (Toronto: SQE.UN) has acquired all of the Alberta oil and gas assets of Calgary-based Dynamic Oil & Gas Inc. (Toronto: DOL; Nasdaq: DYOLF). Dynamic has contributed all of its British Columbia and Saskatchewan assets into a new exploration-focused, publicly traded subsidiary, Shellbridge Oil & Gas Inc. Sequoia purchased all of the outstanding shares of Dynamic for a total purchase price of approximately C$67.5 million. Each Dynamic shareholder received C$1.71 in cash and one share of Shellbridge for each share of Dynamic stock. The new company will be managed by Dynamic's current management team and board. Dynamic transferred into Shellbridge all of the benefits and obligations of Dynamic's producing assets and undeveloped land in British Columbia and Saskatchewan. Dynamic has retained all of its Alberta properties. Shellbridge is being established with an experienced management team, an initial net asset value of C$30.9 million, total proved-plus-probable reserves of 2.4 million barrels of oil equivalent, an initial production base of 900 barrels of oil equivalent per day, an initial commodity mix of 80% heavy crude oil and 20% gas, and a land position of 190,716 gross acres, 90% undeveloped, 71% concentrated in northeastern British Columbia. The company operates 80% of its production base and own an average working interest of 54% in 127,184 gross acres in three core properties at Cypress and Orion, British Columbia, and Mantario East, Saskatchewan. The balance of its acreage is in the Fraser Valley, British Columbia, and southwestern Saskatchewan. Daily average production is approximately 1 million cubic feet per day of gas from the Cypress/Chowade area and 750 barrels per day of oil from the Mantario East area, for a total of 900 barrels per day. Independent reserve estimates attribute proved- plus-probable reserves of 4.1 billion cubic feet of gas and 1.7 million barrels of heavy crude oil. Orion Securities Inc. was financial advisor to Dynamic, while Peters & Co. Ltd. provided a fairness opinion to Dynamic's board.
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