Pieridae Energy announced that it has signed a purchase and sale agreement with Shell Canada Energy to purchase all of Shell’s midstream and upstream assets in the southern Alberta Foothills for a purchase price of £114m, subject to normal adjustments.
Pieridae said that it intends to pay £104m in cash, through the issuance of term debt and equity, and issue Pieridae common shares to Shell worth aggregate value of £8m purchase price for the transaction.
Pieridae chief executive officer Alfred Sorensen said: “This Acquisition will be immediately accretive to the Company and also allows us to enhance the sustainability of our existing asset base.It also demonstrates solid progress for our flagship Goldboro LNG project. We said we would acquire additional gas supplies for the LNG facility and we have done that.
“Not only does this deal help us secure the remaining conventional natural gas supply needed for the first train of the Goldboro LNG project, it makes Pieridae a major player in the Alberta midstream and upstream industry.”
Pieridae to close the transaction in the third quarter of 2019
Pieridae is expected to close the acquisition in the third quarter of 2019, subject to satisfactory completion of due diligence by Pieridae on the assets.
The company said that the conventional natural gas assets it is controlling are expected to support up to £899m in the form of credit support from the German government under the UFK program to develop these upstream assets as part of the Goldboro LNG Project.
Based on the 2019 first quarter average, the assets included in the transaction are currently producing approximately 28,623 barrels of oil equivalent per day (BOE/d).
The production is comprised of approximately 118.9 million cubic feet per day (MMcf/d) of natural gas, 5,646bbl/d of natural gas liquids and 3,161bbl/d of condensate and light oil.
Pieridae is also expected to acquire three deep cut, sour gas processing plants namely, Jumping Pound, Caroline and Waterton, with a combined capacity of approximately 750MMcf/d, a 14% working interest in the Shantz sulphur forming plant, and nearly 1,700km of pipelines.
Sorensen added: “But more than that, it creates a solid, ongoing foundation for the Company as we continue to build toward becoming the first Canadian company to market LNG off the east coast to global consumers.”
“Pieridae would also like to acknowledge the Treaty 7 Nations as long-term, vital partners with respect to the Assets. In the spirit of reconciliation and cooperation, Pieridae remains committed to respectful engagement and collaboration with Indigenous Peoples.”
Pieridae said that the assets to be acquired are in line with its existing Central Alberta properties, offering further consolidation of the productive Alberta and British Columbia conventional foothills natural gas pools.
