Toro Oil & Gas Ltd. (Toronto Venture: TOO) has announced that the previously announced acquisition of high quality, low decline, Viking light crude oil producing assets located in east central Alberta closed today. Total consideration of $25.0 million was satisfied through a cash payment of $22.5 million and the issuance of 1,191,895 common shares of the Calgary-based company, exclusive of normal closing adjustments.

Acquisition highlights:

  • Current production relating to the acquisition is approximately 400 boe/d, with a significant weighting to 35°API oil;
  • Internal estimates of significant original oil in place (OOIP) of 300 million barrels of which only 5% has been recovered to date;
  • Ownership of key producing infrastructure, including oil batteries, pipelines and waterflood facilities;
  • The company now holds a total of 93 net sections of land in the Viking light oil fairway

New $25 million credit facility

With the closing of the acquisition, Toro arranged a new $25 million credit facility with the National Bank of Canada, replacing the existing credit facilities. The credit facility consists of a $15 million revolving operating demand loan and a $10 million acquisition/development demand loan. The interest rate in connection with the credit facility is based on the bank's prime rate plus an applicable margin that is tied to certain financial ratios in respect of Toro and the type of advances under the credit facility. The credit facility is secured by a fixed and floating charge on the company's assets.

Combined with the previously announced $20 million bought deal equity financing, Toro's financial position and liquidity heading into the beginning of 2015 is anticipated to address future capital plans and other corporate expenditures. With the successful conclusion of a number of recent corporate activities, the company now looks forward to developing this core area while looking for opportunities to enhance its portfolio through organic growth and strategic acquisitions.