PERTH (miningweekly.com) - Dual-listed Aurora Oil & Gas would spend some $117.5-million to acquire 2 700 acres of land in South Texas.

The assets consist of two consolidated blocks located within the liquids-rich zone of the Eagle Ford shale trend, and are either adjacent or in close proximity to the company’s existing Sugarkane Field acreage.

The assets include average December 2012 production of around 1 620 barrels of oil equivalent a day net of royalties from 11 wells, as well as associated interests in field infrastructure and related assets.

The production comprises 84% liquids and represents a 12% increase to Aurora’s 2012 exit production.

“This acquisition is a natural extension from Aurora’s existing non-operated position within the sweet spot of the Eagle Ford trend. The acquisition of an operated asset that is held by production offers us considerable flexibility in the timing and methodology of development, adds materially to current production and includes upside to the reserves to be booked through higher density drilling and the evaluation of additional formations,” said CEO Douglas Brooks.

Aurora said on Friday that the acquisition would increase the company’s net core Eagle Ford shale acreage by some 14% to over 21 800 acres. The company would become the operator of the asset, and has secured new and existing contractors to assist in project execution.

“This acquisition adds to our position in the highest-quality liquids-rich part of the Eagle Ford play,” said Aurora chairperson Jon Stewart.

“Aurora is extremely selective around acquisition opportunities and we firmly believe the purchase of this acreage will provide significant value and upside to our portfolio through its current production capabilties and reserve base. We have ensured maintenance of a conservatively geared balance sheet, facilitated by our increased 2012 earnings,” said Stewart.

He noted that the purchase price and the associated development capital would likely be satisfied through existing and new debt facilities, adding that Aurora had obtained a $125-million bridge loan commitment from Credit Suisse. This was in addition to the increase in the funding available to Aurora under an existing $300-million senior secured revolving facility.