Good afternoon, folks. I am JP Lachance, President and CEO of Peyto Exploration & Development Corp. Before I start, I'd like to remind everybody that all statements made by me during this call are subject to the same forward-looking disclaimer and advisory set forth in the company's news release issued earlier today. Today marks a special day in Peyto's history. We're excited to announce that we've entered into an agreement to acquire a very strategic asset that is highly complementary to our business. Peyto has entered into an agreement to acquire Repsol Canada Energy Partnership, which holds the assets of the Canadian upstream oil and gas business of Repsol Exploración, for a cash consideration of $468 million, subject to closing adjustments and customary closing conditions, including the receipt of all regulatory approvals.
This acquisition really meets all the criteria that we look for in a deal. We're not buying this asset for the current production, although it comes with 23,000 BOEs a day of liquid rich, low decline, natural gas, or for the short term appreciation metrics, but for the longer term quality of the drilling inventory and for the significant infrastructure that comes with it. Not to mention, this is in Peyto's backyard, so integration and optimization is obvious when you look at slide two in the acquisition presentation available on our website. Frankly, we've coveted these lands for a long time. In fact, our geoscience team have mapped the opportunities across these lands in great detail for years. We have roads, leases, and pipelines nearby that we can use to optimize production and future drilling plans.
The drilling density on these lands are the same now as where Peyto's adjacent assets were 10 years ago. So you can imagine the opportunity and the prospectivity of these, of these assets. In the last decade, Peyto has grown production on our similar lands from 40,000 up to 100,000 BOEs a day, and we expect to be able to do the same thing on these new lands. We've been very selective and acquisitions are rare at Peyto, but we have a proven track record of buying and exploiting little tuck-in acquisitions and growing production multiple times, like we did with Cecilia and Brazeau deals in the last two years. I'd like to think of this opportunity as just another one of those tuck-ins, albeit a little bigger.
I don't think there's a better fit for Peyto, and we believe these assets alone have the potential to grow to 100,000 BOEs a day with the boatload of, with the boatload of drilling locations and all the infrastructure that comes with it, which is only 35% utilized at this time. We contracted GLJ Ltd. to evaluate the reserves, the details of which are in the release and on slide 4 of the acquisition presentation. GLJ evaluated the base PDP reserves and the upside. Peyto sees more than 800 internally, locations, and GLJ booked a subset of those at 297. If you look at slide 8 of the acquisition presentation, you'll see how attractive the half-cycle returns look on these lands. So these locations, both booked and unbooked, will immediately compete for capital on our go-forward plans.
If you look at the values of the producing reserves, they essentially pay for this acquisition. That means we didn't have to pay for the upside from future drilling, the underutilized infrastructure, and the synergies of the business due to our overlapping infrastructure and operational presence in the area. The Edson Gas Plant is a big part of this transaction. It's really quite strategic. It's right on the main railway that connects to the west. There's a major highway there, Highway 16, and it's connected to both the NGTL mainline and the Alliance Transmission System, which provides an opportunity to pursue commercial opportunities like vertical integration of the business and other ventures.
The Edson Gas Plant also comes with a 12 MW cogeneration plant, and it's proximal to the Cascade Power Plant that should come on in a few months, which we will supply 52 million cubic feet a day of natural gas to for the next 15 years. This acquisition also comes with a 100% working interest in the Central Foothills Gas Gathering System, a 340 km large-diameter sour pipeline network that runs north and south and connects up to the Edson Gas Plant. Combined, Peyto will have a much bigger position in a Deep Basin with 1.2 million acres of mineral land, 17 operated plants with 1.5 bcfd of gas processing capacity, and over 3,400 internally recognized locations to feed those plants and to grow.
Speaking of growth, the three-year plan that we have developed contemplates spending CAD 450 million-CAD 500 million each year to grow production from 123,000, as the combination stands today, to over 160,000 BOEs a day by the end of 2026. The base decline of the combined production will be about 25% per year, and we expect to add production to more than offset that at a capital efficiency between $10,000-$11,000 per flowing BOE, which is an improvement over our capital efficiency estimates today of around $12,500, and a testament to the quality of what our com or what these combined assets will look like.
We expect initially it will take some time to digest and integrate all this infrastructure into the Peyto way, but we already have several locations ready to drill when the deal closes, which we expect will be in mid-October. Altogether, Peyto will have enough firm transportation service on NGTL System to execute our three-year plan. Now, as we go forward, this plan, as it's contemplated and using the August 22 strip pricing, will generate sufficient funds flow to sustain dividends and pay down debt to below 1x debt to EBITDA before the end of 2025. Going forward, we expect more and more free funds flow will be available for further debt repayment and increasing dividends.
If the strip doesn't play out as expected, we can maintain production and the current dividend below $2/MMBtu at NYMEX, in conjunction with our mechanistic hedging program. And remember, we already have 280 million cubic feet a day of natural gas price fixed at CAD 4.19/Mcf for 2024, and 176 million of fixed price at CAD 4.24/Mcf for 2025, and we will continue to add to this position. This, combined with our power deal at Cascade, which yields a very attractive gas price under current power prices, and our diversification to premium seasonal markets like Ventura, Dawn, and Chicago, and Midwest and Malin in California, means we have lowered future risks on a capital, a captive AECO market.
To accommodate this very strategic acquisition, we are proud to have the support of Bank of Montreal, CIBC, and National Bank to drive the upsizing of our revolving credit facility to CAD 1 billion and to provide a CAD 300 million two-year term loan. On top of that, we've entered into a bought deal equity offering for total gross proceeds of approximately CAD 125 million. As we grow our production through 2025, our timing should be just right to take advantage of the LNG expansion, LNG expansions going on in Canada and the U.S. and the increased demand for North American natural gas. Needless to say, the Peyto team are quite excited about the deal and are anxious to get through to closing so we can start working the assets.
Peyto has a proud 25-year history of profitable growth and returning those profits to shareholders in the form of dividends, and none of that changes with our plans going forward. Please refer to our website for more information at www.peyto.com, and thank you for listening.