Another big acquisition in Chinook's back yardI notice that Tourmiline (T.TOU) just purchased Shell Canada's assets in NE British Columbia and the Grande Prairie arch for $1.369 Billion.
Here is the press release:
https://www.tourmalineoil.com/assets/Tourmaline-Press-Release-October-20-2016-FINAL.pdf
NEWS RELEASE OCTOBER 20, 2016
TOURMALINE OIL CORP. ANNOUNCES STRATEGIC ASSET ACQUISITION IN THE ALBERTA DEEP BASIN AND NEBC MONTNEY COMPLEX, $739.4 MILLION EQUITY FINANCINGS AND INCREASED 2017 GUIDANCE
Calgary, Alberta - Tourmaline Oil Corp. (TSX:TOU) (“Tourmaline” or the “Company”) is pleased to announce that it has entered into an agreement with Shell Canada Energy (“Shell Canada”) to acquire strategic assets located in the Alberta Deep Basin (the “Deep Basin Assets”) and the NEBC Montney Complex (the “Montney Assets”) for total consideration of $1.369 billion (before customary adjustments) including cash consideration of $1.0 billion and the remainder in Tourmaline common shares (the “Acquisition”). The Acquisition is a major step in the Company’s ongoing plan to not only become Canada’s, but also one of North America’s, largest, lowestcost and most-profitable natural gas and liquids producers.
The cash portion of the Acquisition purchase price will be funded through committed concurrent equity financings totalling $739.4 million and Tourmaline’s existing credit facilities.
THE ACQUISITION AND STRATEGIC RATIONALE
Pursuant to the Acquisition, Tourmaline has agreed to acquire current production of approximately 24,850 boepd, estimated current 2P reserves of 473.5 mmboe(1) and a combined evaluated future drilling inventory of 2,147 locations(2) between the Deep Basin Assets and Montney Assets. The total purchase price of $1.369 billion compares favorably to a current 2P NPV10 of $2.3 billion(3).
The Deep Basin Assets consist of 382 gross sections (154 of which are joint working interest with Tourmaline) and current low-decline production of approximately 18,650 boepd. Tourmaline will also acquire Shell Canada’s infrastructure consisting of three 100%-operated gas plants (estimated processing capacity of 200-225 mmcfpd) and 719 km of pipelines, providing Tourmaline with total operated processing capacity of over 1.0 bcf/day in the Alberta Deep Basin. The Company plans to add approximately 100 mmcfpd of new production in 2017 from the Deep Basin Assets through the drilling of 31 horizontal wells and fill the acquired infrastructure capacity.
The Montney Assets in BC consist of a large, contiguous 100% working interest 101 section land block in an area with 300 metres of Montney gross pay, four separate lobes to develop, and liquid content ranging from 1080 bbls/mmcf. Current production is approximately 6,200 boepd from 25 existing horizontal wells that have delineated the land block. Estimated 2P reserves are 371 mmboe with an average liquid yield of approximately 30 bbl/mmcf (GLJ Montney Report) with only 375 locations included in the GLJ Montney Report out of an internally estimated 1,647 locations. Tourmaline plans to drill 13 horizontals on the Montney Assets in 2017 and 54 horizontals in 2018 in conjunction with Company infrastructure construction. The natural gas is sweet and the strong liquid content will provide a significant uplift to Tourmaline’s overall condensate production levels. Tourmaline currently drills the lowest-cost completed gas wells in the entire Montney play; transferring this technology to these Montney Assets is expected to yield top-decile play economics/gas supply costs.
The acquired Montney Assets now provide Tourmaline with sufficient size and scope in the Northern Montney play area to drive strategic Company-operated infrastructure development. The Montney Assets also make existing Company lands at Blueberry-Inga-Attachie (approximately 768 potential drilling locations) substantially more valuable through this planned infrastructure development.
Including the effect of the Acquisition and associated development, the Company is expecting 2017 production of approximately 250,000-260,000 boepd, and 2018 production levels of 310,000-320,000 boepd.
The press release continues for a number of pages from here