04/09/2014 07:33 EDT | Updated 06/09/2014 05:59 EDT

Long Run Exploration buys Cardium assets for $225M from unnamed vendor

CALGARY - Long Run Exploration Ltd. (TSX:LRE) has an agreement to acquire strategic liquids-rich natural gas assets focused on the Cardium in the Deep Basin area of Alberta for $225 million.

Long Run said Wednesday that the deal with a company it identified only as an Alberta-based intermediate oil and gas producer, will add approximately 7,000 barrels of oil equivalent per day — 25 per cent oil and NGLs — of concentrated, long-life liquids-rich natural gas production.

It will also and provide an additional core area that will expand its drilling inventory to support future growth, the company said in a release.

The consideration includes Long Run's disposition of approximately 400 BOE/d of heavy oil at Lloydminster to the unnamed vendor.

Long run the purchase will be partially funded with a concurrent $120-million bought deal equity financing of subscription receipts, with the balance from the company's credit facilities. Long Run anticipates the credit facilities increasing $100 million to approximately $575 million on closing of the acquisition, expected about May 30.