Suncor has sold off another piece of Petro-Canada's natural gas empire, handing a chunk of Alberta land to Abu Dhabi's state energy company.
Taqa North, the Canadian subsidiary of Abu Dhabi National Energy Company, will pay Suncor $285-million for a swath of gas-rich land near the Alberta town of Sundre, located about 120 kilometres northwest of Calgary.
Suncor has engaged in a months-long sales binge as it works to trim its natural gas holdings to better focus its attention and capital on the oil sands. The deal brings Suncor's sales tally to $2.4-billion.
For Taqa, it's an ideal match with land it already owns - and a good deal. Where some of Suncor's more recent sales have netted it as much as $58,000 per flowing barrel - the first-quarter average was $54,000 - the Taqa deal is worth just under $47,000 per flowing barrel. (Although the sold land produces natural gas, energy deals are typically valued according to their production equivalent in barrels of oil.)
Many Taqa and Suncor lands in the Sundre area border and, in some cases, checkerboard each other, said Sean Moore, vice-president of Taqa's central asset team.
"This Suncor acquisition just fits like a glove. We've got ideal infrastructure alignment," he said. "And this is an area that Suncor, or their predecessor Petro-Canada, hadn't been very active in for a while. We see a lot of upside development potential in this area."
Suncor currently produces 6,100 barrels of oil equivalent from the lands it is selling, but Taqa sees "a large number of locations that we believe we can drill and definitely increase that production," Mr. Moore said.
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Taqa also plans to make use of slack capacity on some of Suncor's infrastructure.
Suncor has, since its merger with Petro-Canada, sold lands in the U.S. Rockies, Western Canada, the Netherlands and Trinidad and Tobago. It wants to net up to $4-billion from the sales, and it has yet to divest holdings in the North Sea and other parts of Western Canada.
Taqa produces nearly 90,000 barrels of oil equivalent in Canada, and owns land across the western provinces. Last July, it bought 10,000 hectares of shale gas land near Fort Nelson for $65-million, in hopes of using that land as a beachhead into further acquisitions of the hugely prospective new plays.
Reports have also suggested that Taqa has a significant kitty earmarked for oil sands acquisitions, although the company has yet to make any substantial moves in that direction.
Another Abu Dhabi company, International Petroleum Investment Co., bought Nova Chemicals Corp., the well-known Alberta petrochemical company, last February for $499-million (U.S.), plus $2.3-billion in assumed debt.
Nathan VanderKlippe