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    Canada’s Whitecap boosts Montney position


Predominantly an oil producer, acquisition increases the company's natural gas exposure.

by: Dale Lunan

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Natural Gas & LNG News, Americas, Corporate, Mergers & Acquisitions, Investments, News By Country, Canada

Canada’s Whitecap boosts Montney position

Canadian producer Whitecap Resources said April 5 it had entered into an agreement to indirectly acquire Montney producer Kicking Horse Oil & Gas for C$300mn (US$239.6mn) in total, comprised of 34.5mn Whitecap common shares, C$56mn in cash and the assumption of C$54mn of debt.

Kicking Horse’s assets consist primarily of a condensate-rich Montney development at Kakwa, comprising 60 net sections (38,400 net acres) currently producing about 8,000 barrels of oil equivalent (boe)/day, 68% of which is natural gas and 32% of which is liquids, primarily condensate.

The acquisition will nearly double Whitecap’s Montney position to 118 net sections (75,520 net acres), with 437 net drilling locations identified across a number of Montney horizons.

Production from the acquired assets is expected to be optimised at between 18,000 boe/day and 19,000 boe/day over the next 12-15 months with the drilling of 8-10 wells each year, Whitecap said.

Whitecap Resources will remain predominantly liquids weighted, at 76% oil and natural gas liquids.

“The additional natural gas volumes will improve corporate capital efficiencies and diversify our revenue mix, with Whitecap also benefitting from recently improved Western Canadian Sedimentary Basin natural gas fundamentals and additional intra-basin demand and takeaway capacity on the NGTL system scheduled to be completed in late 2021 or early 2022,” the company said.

Kicking Horse is an indirect subsidiary of Houston’s Quantum Energy Partners, a private equity provider with investments across the oil, gas and renewables value chain.

The acquisition is expected to close by May 31, subject to customary closing conditions, including Kicking Horse security holder approval and receipt of necessary regulatory approvals, including that of the Toronto Stock Exchange.