CALGARY, July 7, 2016 /CNW/ – Keyera Corp. (TSX:KEY) (“Keyera”) announced today that it has agreed with Bellatrix Exploration Ltd. (“Bellatrix”) to acquire an additional 35% ownership interest in the O’Chiese Nees-Ohpawganu’ck gas plant (the “Alder Flats Plant”) and the associated gathering pipelines (collectively the “Facilities”). The total consideration for the acquisition is $112.5 million, which includes the additional working interest in the Facilities, a 10-year take-or-pay commitment, an area dedication agreement and a prepayment of 35% of the estimated future construction costs of Phase 2 of the Alder Flats Plant. The acquisition is subject to typical closing conditions and is expected to close in August.
Upon closing, Keyera will own 70% of the Facilities while Bellatrix will continue to be an owner and the operator of the Facilities. Currently, the Alder Flats Plant, which is located in west central Alberta, has a licenced capacity of 110 million cubic feet per day. Phase 2 is expected to have a design inlet capacity of 120 million cubic feet per day and a target on stream date in the first half of 2018. Bellatrix is responsible for constructing Phase 2 and funding 60% of the costs.
“Keyera is pleased to increase our ownership interest in a fully-utilized gas plant within our core operating area and to continue our partnership with Bellatrix,” said David Smith, Keyera’s President and Chief Executive Officer. “The acquisition is expected to be immediately accretive to Keyera’s distributable cash flow per share, which creates value for our shareholders. With strong geology supporting producer activity in the area, the Alder Flats Plant is expected to remain a core gathering and processing asset for Keyera and a cost-effective, networked processing solution for area producers over the long term.”
Keyera Corp. (TSX:KEY) operates one of the largest midstream energy companies in Canada, providing essential services to oil and gas producers in the Western Canada Sedimentary Basin. Its predominantly fee-for-service based business consists of natural gas gathering and processing, natural gas liquids processing, transportation, storage, marketing, iso-octane production and sales, and an industry-leading condensate system in the Edmonton/Fort Saskatchewan area of Alberta. Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner.