Canadian Natural acquires conventional Devon Canada assets

Oil and gas production company Canadian Natural Resources has acquired Devon Canada’s conventional assets for $3.125bn.

Located in Western Canada in areas adjacent or proximal to the company’s existing operations, the acquired lands and production base are all concentrated liquids-rich natural gas weighted assets. The acquisition does not include Devon’s Horn River assets and heavy oil properties in Canada.

The estimated production at present from the acquired properties is said to be around 383 million cubic feet a day of natural gas, 10,800 barrels a day of light crude oil and 12,000 barrels a day of NGLs. It is around 72% operated.

Associated key strategic facilities are included along with the production. These include six major owned and operated natural gas plants with a gross processing capacity in excess of 1,000 million cubic feet a day, and four major owned and operated oil batteries.

The assets also include a land base of around 2.2 million undeveloped net acres and 2.7 million net acres of royalty and fee simple lands. According to the company, the asset package acquired includes a royalty revenue stream which is set to earn approximately $75m in cash flow during 2014.

Canadian Natural president Steve Laut said that the acquired assets are largely operated and are a good fit with the company’s existing assets and infrastructure.

"The combined assets and infrastructure provide synergies to more effectively and efficiently operate once fully integrated," Laut added.

The acquisition also provides significant upside in liquids-rich natural gas and light crude oil properties.