Resources Utica buys Cuda

Resources Utica has just acquired for $ 10.6 million the Quebec assets of Cuda Oil and Gas mainly consisting of wells of the Galt property located about twenty kilometers west of Gaspé. The Galt wells were originally developed by Junex.
TheMontreal firm had unsuccessfully attempted to acquire Junex in the summer of 2018, but this bid was deemed hostile by Junex management. Cuda, established in Calgary, won the bid before serving a few months ago to sell its Quebec asset, which also includes a building and three drills.

Utica Resources spokesperson Yvan Loubier explains that the company is acquiring Cuda’s Quebec assets because it sees “a lot of potential for certain elements, because it is conventional oil” that could “be exploited without fracturing “, and that this condition makes it” likely to obtain social acceptability “.

At a standstill since 2016

Exploration activities on the Galt property have been halted since 2016. At the time, the Junex management had asked the Quebec government for a license to operate this property, in light of drilling that had revealed some potential for development. daily production.

The company was returned $ 32 million in investment in just over a decade on the Galt property. The Galt 4 well is where Junex has achieved, by far, its best results, with a total production of 14,000 barrels over a few months, punctuated by various stops. Wells Galt 1, 2 and 3 did not contain potential for profitability.

In 2017, Junex was targeted by protesters for several weeks in Galt. The company has also been obliged to initiate discussions with the natives of Gaspésie, including those from the Gespeg community in Gaspé. In 2018, Junex-Cuda’s projects were submitted to an environmental impact study, conducted by the Bureau d’audiences publiques sur l’environnement (BAPE). This study is still in progress.

Extensive reflection

At the same time, Utica Resources is engaged in a broad reflection on the follow-up that it intends to give to the development of the Galt property, notably by resuming “the approaches with the aboriginal communities”.

This reflection also focuses on how much future drilling will take Galt, where Cuda had planned to drill half a dozen other wells for $ 30 million. “We also bought some analyzes,” says Loubier, referring to studies commissioned for Junex and Cuda over the years.

Preparation for BAPE-related work, and the choice of opportunities for oil that could possibly be exploited at Galt are also part of Utica Resources’ agenda. The firm has created a division called Gaspé Énergie for its Galt project.

A fifth well was drilled at Galt before the fall of 2016. When applying for a license three years ago, Junex’s management was looking into the possibility of doing production testing at Galt 5, which is still in progress. carry out.

Quebec and European shareholders control Utica Resources.

The firm is also evolving in the recovery of biogas and geothermal energy.

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