Canada’s Tourmaline Builds Montney Asset Base
Canadian Montney producer Tourmaline Oil said February 24 it had entered into a pair of agreements to acquire one public and one private oil and gas company with Montney assets and completed a previously-announced transaction with Painted Pony Energy.
The two corporate acquisitions – of publicly-held Chinook Energy and privately-owned Polar Star Canadian Oil & Gas – add about 6,000 barrels of oil equivalent (boe)/day of production, proved plus probable (2P) reserves of some 116.3mn boe and 160,000 acres of Montney lands for a combined cash purchase price of C$33.4mn (US$25.2mn).
The previously-announced transaction with Painted Pony adds a 75% working interest in a 13-section block adjacent to Tourmaline’s Gundy complex for C$49mn. A new nine-well pad on the lands will be brought on line in Q3 2020, adding initial production of 15,000 boe/day, consisting of 65mn ft3/day of natural gas and 5,000 b/d of liquids.
The Chinook Energy acquisition will be completed by way of a plan of arrangement that will see Tourmaline acquire all of the issued and outstanding shares of Chinook for a cash consideration of C$0.0675 per share, or C$24.4mn, including assumed debt. Chinook’s northeast BC assets include 3,500 boe/day of production, 35.6mn boe of 2P reserves, 54,000 acres of Montney lands, a gas plant, a compressor station and a 190mn ft3/day regional gas pipeline. The acquisition is expected to close in late April 2020.
Tourmaline acquired the Polar Star assets on February 14 for a total cash consideration of $9mn, plus working capital adjustments. The acquired BC assets include 2,500 boe/day of production, 2P reserves of 80.7mn boe, 106,000 net acres of Montney lands and a compressor station.
Tourmaline is Canada’s largest gas producer, with 2019 estimated production of some 1.4bn ft3/day, and the largest producer in the Montney, with over 525mn ft3/day.