Bonavista Energy Corporation announced that it has entered into an agreement to acquire certain natural gas weighted properties located within its deep basin core area in west central Alberta. The acquisition has an effective date of July 1, 2012 and is expected to close on or about October 1, 2012 for an estimated purchase price at closing of $155 million. The completion of the transaction is subject to customary regulatory approvals and other conditions. At closing, production from the acquired properties is estimated to be 6,700 boe per day (94% natural gas). The acquired properties are situated on approximately 113,000 net acres of land located adjacent to the company's existing deep basin land position in west central Alberta. The company has identified approximately 27 high impact horizontal drilling locations offering the potential to significantly enhance production and resource recovery. The primary zones include the Wilrich and Bluesky as well as several secondary horizons such as the Rock Creek, Notikewin, Gething, Cadomin and Second White Specs. In addition, the acquired properties offer numerous low risk vertical drilling locations and recompletion opportunities with a predictable, low cost production base that is well positioned for a gradual improvement in natural gas prices.

The company provided production guidance for the fourth quarter and full year and capital expenditure guidance for the full year of 2012. The company's board of directors approved an increase in its 2012 capital budget to $410 million, including $10 million of development expenditures allocated to the acquired properties. This revised capital budget consists of $385 million in exploration and development spending and $25 million in net acquisition spending.

The company anticipates fourth quarter 2012 production of between 73,000 and 74,000 boe per day and average 2012 production of between 69,500 and 70,500 boe per day.