11:44 AM EDT, 08/06/2024 (MT Newswires) -- Rubellite Energy ( RUBLF ) over the holiday weekend said it acquired Buffalo Mission Energy, a closely held heavy-oil producer, for about $97.5 million, .

The Western Canadian oil-focused producer said the acquisition provides a production and inventory base to ground a growth strategy in the Mannville stack of the Cold Lake Oil Sands Region, complementary to Rubellite's Clearwater assets in northern Alberta.

The deal adds about 67.3 gross sections of contiguous, stacked Mannville rights with a total of 170 gross identified drilling locations in the primary producing Waseca formation and 220 gross additional potential locations across other zones within the Mannville stack. It also adds high-netback conventional heavy oil production of about 2,500 barrels per day and growing.

The deal increases Rubellite's current conventional heavy oil production base by about 56% and its adjusted funds flow by about 38% on an annualized basis.

Rubellite funded the cash portion of the deal through expanded bank credit facilities and a new senior second-lien term loan for $20 million. The company's borrowing base has been increased to $100 million from $60 million.

The company's lenders also provided a $20 million bank syndicate term loan maturing on Dec. 15.

Separately, Rubellite reported second-quarter conventional heavy-oil sales production of 4,503 barrels per day, relatively unchanged from the previous quarter.

Adjusted funds flow in the second quarter was $20.7 million, or $0.33 per share, an increase of 12% from the previous quarter.

Rubellite also raised its 2024 production sales guidance from 4,600 to 4,900 barrels of oil equivalent per day (boe/d) to 5,600 to 5,900 boe/d, growing roughly 70% year over year. The company expects to exit the year at around 7,500 to 7,900 boe/d.

The company is scheduled to release its second-quarter financial and operating results on Aug. 8.

Rubellite shares were last seen up $0.12 to $2.19 on the Toronto Stock Exchange.

Price: 2.19, Change: +0.12, Percent Change: +5.80