CALGARY, June 24, 2016 /CNW/ – Teine Energy Ltd. (“Teine” or the “Company”) announces that it has closed its previously announced asset acquisition of South Western Saskatchewan oil-weighted assets from Penn West Petroleum Ltd. for cash consideration of $975 million. The acquisition includes a core position within the Saskatchewan Viking light oil play as well as low decline conventional Bakken heavy oil properties currently under water flood.
“This was an increasingly rare opportunity to acquire a scalable high netback oil position within one of North America’s most economic light oil plays,” said Jason Denney, President and Chief Executive Officer of Teine Energy. “Our team is excited to apply our skillsets to the assets.”
Acquisition Metrics
Key acquisition statistics are noted below:
Purchase Price: |
$975 million |
1H 2016E Production(2): |
15,495 boe/d (91% liquids) |
Proven plus Probable Reserves(1): |
53.2 MMboe |
Risked Hz Viking locations(2): |
>1,000 |
Undeveloped land: |
409,000 Acres (640 sections) |
Key acquisition metrics are as follows:
2016E production |
$62,924/boe/d |
Proved plus Probable Reserves: |
$18.33/boe |
Proved plus Probable RLI: |
9.7 years |
Teine has identified over 1,000 undeveloped Viking horizontal drilling locations which include extended reach horizontal opportunities within the acquired Viking lands. The acquired lands contain some of the largest original oil in place (OOIP) within the play and over 50 Viking sections containing water flood potential.
The asset includes approximately 7,000 bbl/d(2) of low decline conventional Bakken heavy oil pools of which 98% are under water flood which has resulted in a stable and predictable base decline of approximately 10%. Currently active polymer injection within the Coleville Pool has exhibited a promising response and through further expansion may result in significant additional reserve recovery and further decline mitigation.
The acquisition adds to Teine’s extensive infrastructure, growing the Company’s owned and operated oil treating capacity to approximately 55,000 bbl/d and water treating and injection capability to over 200,000 bbl/d. Teine’s early and continued focus on infrastructure is reflected in its industry leading cost structure and will support the Company’s multi-decade drilling plan and secondary recovery schemes.
Teine remains focused on delivering a cash flow neutral capital program and will adjust spending in response to changes in commodity pricing. Teine is now the largest landholder and producer within the Saskatchewan Viking fairway, controlling over 1,000 net sections (640,000 acres) of undeveloped land containing over 5,000 risked Viking horizontal locations.
About Teine Energy Ltd.
Teine is a private Calgary-based exploration, development and production company focused on acquiring and developing oil and natural gas properties in the Western Canadian Sedimentary Basin. Approximately 90% of Teine’s production is weighted towards crude oil and natural gas liquids.
1. |
Gross company reserves, as prepared by Sproule Associates Limited in a report effective December 31, 2015 in accordance with National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. |
2. |
Based on Q1 actuals and Management’s best estimates. |