logo-loader

Canada focused oil producer Northern Petroleum gives a taster of the deals on offer with small, but innovative acquisition

Published: 08:15 08 Mar 2017 GMT

Albetra
Weather permitting, work will be carried out as part of the winter programme

Northern Petroleum (LON:NOP) Wednesday provided a small taster of the opportunities on offer in Canada with a modest acquisition at very little cost.

It is taking control of six shut-in production wells near its Rainbow assets in Alberta that are considered non-core by the unnamed vendor.

It is doing the deal alongside its partner High Power Petroleum (H2P), which is acquiring 25% of the package, which also includes a water disposal well and injection pump, production facilities and storage tanks.

The first four wells will be brought back into production as part of the winter work programme if the weather allows. Failing that, they will be part of the summer roster.

WATCH: 'All eyes on the summer work programme and beyond', says Northern Petroleum's Keith Bush

WATCH: Northern Petroleum boss on deal

The wells have a direct sales and tie-point to the Plains Midstream Pipeline.

The deal terms can best be described as innovative – and on the face of it extremely helpful to Northern and its partner.

The consideration is the assumption of abandonment liabilities for the wells, which are calculated by the Alberta Energy Regulator to be US$1.1mln.

It means the pair would lodge US$700,000 with the authorities. However they would get back that deposit once the wells were back on stream in the third quarter of this year.

Northern chief executive Keith Bush said: "This acquisition is a small example of the production acquisition opportunities available close to the company's infrastructure.

“The additional production will enhance the existing production base in conjunction with the current work programme and demonstrates the company's ability to grow production both organically and by acquisition.

"We continue to look at further suitable assets in the region, alongside reviewing more substantial production and development opportunities in Alberta and Saskatchewan under the terms of our area of mutual interest agreement with H2P."

Investor Update: Circassia boosts first-half revenues by 40%

Headlines from the Proactive UK newsroom. Drug inhaler specialist Circassia (LON:CIR) increased revenues by 40% to £27.9mln in the half year to June and expects sales to rise to betwee £60-65mn over the full year. Sales recently started in China and are going well.  Eurasia Mining...

on 26/9/19