Iona Energy Inc. (CVE:INA
) (PINK:IONAF) stock shot up in value after the company declared to be purchasing a full ownership of one of their oil properties.
INA stock price increased 5.6% over the last trading session carrying along a substantial trading volume of 2.5 million which was more than three times heavier than the 90 day average turnover of 718 thousand.
Share price rallied after Iona announced on June 12 that their UK subsidiary entered into a purchase agreement under which they will acquire the share of their partners' interest in the Orlando Oil field. Iona will cover all the historical costs associated with the ownership and will make future payments out of production.
After the acquisition is complete Iona expects to have a Field Development plan by the third quarter of 2012 and have a first oil target by the same quarter next year. After purchasing the interests of their current partners, Iona will hold 100% ownership of the project and will act as an operator.
The acquisition was important for Iona since they hold a 100% ownership of another property, Kells Oil Field, in the same North Viking Graben area of the UK North Sea. Strategically the simultaneous development of both properties would allow for synergies, resulting in lesser expenditures and a larger potential pay-off.