Pieridae acquires Shell Canada’s Foothills assets for $190m
Pieridae Energy has acquired Shell Canada Energy’s midstream and upstream assets in the southern Alberta Foothills for $190 million. With the acquisition, Pieridae now has an extensive drilling inventory encompassing multiple dry gas and liquids-rich gas reservoirs within the Foothills area. The company has engaged professionals, many of whom are transitioning from Shell, who have strong experience managing the four major processing facilities and associated midstream assets.
“We are very pleased to close this transformational acquisition as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least twenty years,” said Pieridae’s Chief Executive Officer, Alfred Sorensen. “We will now complete our negotiations with Kellogg Brown & Root Limited for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision.”
Together with existing Foothills drilling and development experience within the company, Pieridae is well positioned to leverage the US$1.5 billion of the government-backed guarantees for conventional gas supply development which the German government approved in principle. This amount is in addition to the US$3 billion of government-backed guarantees for the construction of the Goldboro LNG facility which the German government has also approved in principle. Certain aspects of the asset retirement obligation with respect to the Jumping Pound and Waterton gas plants remain with Shell.
“There are additional opportunities to develop our liquids-rich areas, process the sour gas, strip out the liquids, store the dry gas and then further develop our dry gas resources down the road,” concluded Sorensen.
In addition to implementation of certain cost savings initiatives, Pieridae anticipates taking full advantage of the gas plant processing capabilities and other associated upstream services developed by Shell.
“Moving forward, Pieridae is committed to working with the communities surrounding its newly acquired assets, including continuing to build trust with the Treaty 7 Nations through respectful engagement and collaboration,” the company said in a statement.
In the first six months of 2019, the assets produced approximately 28,634 barrels of oil equivalent per day (BOE/d) consisting of approximately 119 MMcf/d of natural gas, 5,656 bbl/d of natural gas liquids (NGL) and 3,163 bbl/d of condensate and light oil. Pieridae also acquired three deep cut, sour gas processing plants (Jumping Pound, Caroline and Waterton), with a combined capacity of approximately 750 MMcf/d (currently operating with 420 MMcf/d of spare capacity), a 14 per cent working interest in the Shantz sulphur forming plant, and approximately 1,700 kilometres of pipelines.
For more information visit www.pieridaeenergy.com
18th October 2019