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    Canadian Pieridae Sees Growth in 2020

Summary

Production could triple as Shell assets are developed

by: Dale Lunan

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Canadian Pieridae Sees Growth in 2020

Canada’s Pieridae Energy said December 12 it expects to see production growth of up to 290% next year as it ramps up activities ahead of a possible September 2020 final investment decision (FID) on its 10mn mt/yr Goldboro LNG project in Nova Scotia.

With the recent close of its acquisition of Shell Canada’s Foothills assets, the company expects to see net operating income (NOI) grow to the C$80mn-$110mn (US$60mn-$83mn) range, it said in its 2020 guidance update.

“We are guiding to an increase of up to 10 times our NOI from pre-acquisition levels, which further accentuates the transformational nature and accretiveness of the Foothills assets acquisition,” Pieridae CEO Alfred Sorensen said. “A doubling or close to tripling of daily production speaks to the value of the acquisition and provides us with the majority of the gas resource necessary to supply train 1 at Goldboro.”

In November, Pieridae approved a pre-FID capital budget of $32mn for 2020 and a development expense budget of $16mn in 2020 for the Goldboro project.

The three processing plants acquired from Shell – at Jumping Pound, Caroline and Waterton – are all currently operating at well below capacity, and introducing increased volumes of its own gas as well as third-party gas will improve output volumes and enhance operating efficiencies, Pieridae said. The plants provide enough processing capacity to satisfy the 800mn ft3/day of supply that the first train at Goldboro will require.

“These plants feed into the TC Energy pipeline system and are located south of the often-congested James River transport corridor,” the guidance update said. “This is anticipated to result in lower transportation tolls to AECO and fewer outages.”

In the field, production next year is expected to average between 40,000 and 50,000 barrels of oil equivalent (boe)/day (80% natural gas, 20% liquids) as the company begins to drill through the extensive inventory of locations that came with the Shell acquisition, including multiple dry gas and liquids-rich gas reservoirs within the Foothills region.