HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PAY HERE

Providing coverage of Alaska and northern Canada's oil and gas industry
August 2006

Vol. 11, No. 33 Week of August 13, 2006

Canetic adds to Canadian consolidation

Gary Park

Canetic Resources Trust, armed with a New York Stock Exchange listing it obtained early this year, pushed the total takeovers by Canadian income trusts since late July to four and the combined value to almost C$3 billion.

It spent C$900 million acquiring the natural gas and oil interests of Oklahoma-based Samson Investment.

The gas-weighted properties in central Alberta and northeastern British Columbia yield 13,500 barrels of oil equivalent per day, bumping Canetic’s overall output to 86,000 boe per day (with gas accounting for 47 percent), moving it to the No. 2 spot among conventional trust producers, behind Penn West Energy Trust.

The proved and probable reserves of 40.1 million boe give Canetic 275 million boe.

The deal also includes 230,000 net undeveloped acres, 300 identified development drilling opportunities and 1,000 shallow gas opportunities which need improved gas prices to attract drilling.

Acquisition costs work out to C$67,000 per flowing boe at the high end of the recent price range and C$22.45 per boe of reserves, although, after adjusting the value of undeveloped land, seismic and tax pools the transaction metrics drop to C$56,500 per flowing boe and C$18.95 per boe of reserves.

As other buyers have commented, Canetic Chief Executive Officer Paul Charron said this is the “ideal time to acquire natural gas assets to provide Canetic with a more balance production mix.”

Canetic entered 2006 with capital spending plans of about US$320 million which it expected would more than replace the 12 million boe it produced in 2005.

Charron has made no secret of his ambition to see Canetic take a role in consolidating the scattered independent North American E&P sector, insisting that a higher market value increases buying power, having completed takeovers of Acclaim Energy Trust and StarPoint Energy Trust in January.

He said his plan is to use Canetic as a vehicle for small U.S. independents and their private-equity investors to cash out at public market prices without having to embark on an initial public offering.






Petroleum News - Phone: 1-907 522-9469
[email protected] --- https://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)Š1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law.