Progress Energy Canada, a subsidiary of Petroliam Nasional Berhad (PETRONAS), has closed its previously announced agreement to acquire assets in northeast British Columbia from Talisman Energy. In a second transaction, Progress Energy has also acquired Montney lands in the Julienne area of northeast British Columbia.
The acquisition from Talisman includes about 127,000 net acres of Montney lands and has a current production of approximately 12,500 barrels of oil equivalent per day (boe/d). Progress Energy will acquire Talisman’s interest in the Kobes area where Progress Energy has joint operations with Talisman. In addition, Progress Energy will be acquiring Talisman’s 50% interest in the Farrell and Cypress areas, where Talisman’s partner owns the remaining 50% interest. Under the terms of the Talisman agreement, the partner pays a disproportionate share of development costs. The value of this ‘capital carry’ was approximately USD 870M at the October 1, 2013 effective date, and will be used to fund the majority of Progress Energy’s share of upstream capital investments in the joint-venture area over the coming years. This capital carry offsets the total Progress Energy acquisition cost of approximately USD 1.5B.
In January, Progress Energy closed an acquisition in the Julienne area for approximately USD 130M, which includes four Montney wells that are awaiting completion and about 33,500 net acres of undeveloped Montney lands in the heart of the company’s North Montney Joint Venture British Columbia holdings.
