Tourmaline Oil Corp. to acquire Montney play producer Black Swan Energy
Canadian natural gas producer Tourmaline Oil Corp. has signed a CAD 1.1 billion ($904.9 million) deal to acquire Black Swan Energy, a privately held Calgary-based energy company.
The consideration is made up of 26 million shares of Tourmaline Oil Corp. and the assumption of net debt up to a maximum of CAD 350 million ($287.9 million).
Black Swan Energy is developing a land position in the Montney play in northeast British Columbia. The company has a 50% stake each in the 100MMcf/d Nig Creek gas processing plant and the 165MMcf/d Aitken Creek Gas Plant, both in northeast British Columbia.
The combined capacities of the two gas processing plants are expected to be expanded to 360 MMcf/d.
On the other hand, Tourmaline Oil Corp. is engaged in the Western Canadian Sedimentary Basin.
The acquisition of Black Swan Energy gives it existing 2P reserves of 491.9 million boe, 1,600 Montney horizontal internally estimated drilling locations, and 230,000 net acres of Montney rights. All the reserves to be acquired are contained in the Aitken core development area.
It includes material Montney land positions located at Laprise, Jedney, Beg, and Sojer that complement the existing acreage positions of Tourmaline Oil Corp. in North Montney.
The company said that the transaction marks a further important component of its ongoing consolidation strategy in North Montney, which it sees as the key sub-basin for the supply of Canadian LNG.
The acquisition is also said to complement the core Gundy development of Tourmaline Oil Corp. and along with the recent Polar Star, Saguaro, and Chinook, transactions will enable it to become the current largest producer in North Montney.
Tourmaline Oil Corp. anticipates to average around 500,000 boepd of production by mid-2022.
The deal adds an expected average production of more than 50,000 boepd at close for Tourmaline Oil Corp. following the first phase of the expansion of the Nig Creek gas processing plant. Tourmaline Oil Corp. said that it will complete the phase 2 plant expansion to grow production to 60,000 boepd in the first half of 2022.
In North Montney, the company will grow its production to around 175,000 boepd next year, which includes the Gundy Phase 2 expansion – slated to begin production in January 2022.
The deal, which is subject to regulatory approvals, is likely to close in the second half of July 2021.