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Alberta-based Gear Energy Ltd. said it has started a formal process to explore, review and evaluate “strategic repositioning alternatives” to enhance shareholder value.
Gear’s board intends to “undertake a comprehensive review to identify and consider a broad range of alternatives to enhance shareholder value including, but not limited to, a merger, corporate sale, corporate restructuring, the sale of select assets, the purchase of assets, a potential spin-out of select assets, optimization of future capital allocation and return of capital strategies, or any combination of these alternatives”, the company said in a statement Wednesday.
Gear said it has been “approached by a number of parties interested in transactions”, although it has received no formal proposals yet. The strategic process may result in no specific transaction being pursued, the company noted, as it looks to optimize and improve its operations “with a focus on providing long-term sustainable growth and competitive returns to shareholders”.
Gear stressed that it has not set a definitive schedule for the conclusion of the strategic process or made a decision to pursue any particular alternative. The company said it will not provide updates until its board “approves a definitive transaction or strategic repositioning alternative, or otherwise determines that further disclosure is necessary or appropriate”. Gear has engaged Peters & Co. Limited as financial advisor in connection with the strategic process..
Meanwhile, Gear reported that its production has grown steadily through September, due to ongoing positive results from its summer drilling program. Seven Mannville heavy oil wells have been drilled since spring break-up, with five of them on production and the remaining two expected to be pumping by early October. Three of the wells were unlined multi-lateral horizontal wells and the other four were single lateral lined horizontal wells, the company said.
Gear said September production is currently estimated to average approximately 5,600 barrels of oil equivalent per day (boepd) with exit rates above 5,800 boepd. Four of these seven new wells will not only add new production but have also successfully derisked and expanded future drilling inventory. Additionally, Gear recently mobilized a rig in Tableland, Saskatchewan, to drill the first of two light oil wells.
Gear has also successfully initiated water injection into the new enhanced oil recovery project in the Wildmere Cummings pool as well as completed its planned waterflood expansions in Wilson Creek. Across the entire enhanced oil recovery portfolio, there have been many encouraging results to date in 2023 with oil production increases being seen in Wilson Creek, Maidstone, and Wildmere, according to the company.
Gear is Canadian energy company focused on the exploration and development of heavy oil weighted production, primarily in east central Alberta and west central Saskatchewan.
To contact the author, rocky.teodoro@rigzone.com
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