A subsidiary of International Petroleum (IPC) has signed an agreement to acquire Cenovus Energy’s interests in the oil and natural gas assets in the Suffield and Alderson areas of southern Alberta, Canada, for around C$512m ($414.72m).
The acquisition comprises a contiguous land position of 800,000 net acres of shallow natural gas rights and 100,000 net acres of oil rights in southern Alberta.
With the acquisition, IPC will have 100% operatorship in the assets, which are estimated to have an average production of around 6,900 barrels of oil per day (bopd) and about 102 million standard cubic feet of natural gas per day this year.
International Petroleum CEO Mike Nicholson said: “The Suffield and Alderson assets have been operated safely and efficiently by Cenovus and we are pleased to have reached this agreement to acquire these conventional producing assets as Cenovus focuses on its oil sands and Deep Basin assets.
“This acquisition fits perfectly with IPC’s strategy of leveraging our existing producing asset base as a platform for value accretive acquisitions of long-life, low-decline producing assets in stable jurisdictions with upside development potential.”
The amount needed to complete the acquisition is expected to be fully funded by IPC through debt financing.
The fields are said to have development potential resulting from development drilling, well stimulation and enhanced oil recovery (EOR) opportunities.
IPC has also secured commitments from BMO Capital Markets in connection with new credit facilities of C$325m ($263.25m) to proceed with further development of the proposed assets.
Subject to regulatory approvals, the transaction is scheduled to be completed in the fourth quarter of this year.
Image: IPC will acquire Cenovus Energy’s interests in the oil and natural gas assets in the Suffield and Alderson areas of southern Alberta. Photo: courtesy of International Petroleum / Lundin Group of Companies.