ANNOUNCES ACQUISITION OF RYCROFT AREA GAS PRODUCTION
Return Energy Inc. (RTN.V) has today acquired, through its wholly owned subsidiary, Winslow Resources Inc., certain partner interests in its core area of Rycroft, north of Grande Prairie, Alta., for cash consideration of $750,000 (subject to final adjustments), effective Feb. 1, 2017.
The interests acquired include production of approximately 60 BOE/day (80% natural gas), and the non-operated 50% interest in the Company's operated Rycroft gathering system and gas plant (Return's ownership is now 100%). All of the acquired production is processed through the Rycroft gas plant. Based on the Company's existing independent reserve report prepared by Sproule Associates Limited ("Sproule"), dated effective December 31, 2016 (the "Reserve Report"), the acquisition includes prorated proved developed producing reserves of 171,600 BOE and proved plus probable reserves of 228,400 BOE. Before tax net present value of future net revenue discounted at 10% equals $989,000 for proved developed producing reserves and $1,266,000 for proved plus probable reserves.
Ken Tompson, Return's President & CEO, commented, "This consolidation of interests at Rycroft has been a key part of the development plan put in place since acquiring our Peace River Arch assets in October 2016. Sole ownership of the gas plant will give us greater flexibility and control over plant through-put, in addition to allowing for potential increased revenue derived from future processing of third-party volumes."