|
UK independent to acquire Bow Valley Dana Petroleum to buy Calgary-independent for C$240 million, assume nearly C$200 million in debt; impact for Alaska uncertain Eric Lidji Petroleum News
A partner in a four-company joint venture exploring the North Slope is being acquired by an independent U.K. exploration and production company for approximately C$240 million.
Calgary-based Bow Valley Energy Ltd. said on Feb. 16 that Dana Petroleum Plc. would acquire the company, as well as assume nearly C$200 million in debt and other liabilities.
Bow Valley operates producing fields in the North Sea, but also holds acreage in Alaska through a joint venture led by Brooks Range Petroleum Corp. Late last year Bow Valley froze its interest in an exploration prospect in Gwydyr Bay, north of Prudhoe Bay.
Bow Valley still holds a 20 percent interest in the Tofkat prospect along the Colville River east of the village of Nuiqsut, where the joint venture drilled last winter.
Dana, based in Aberdeen, is focused on the British and Norwegian North Sea, and prospects in Egypt. The company said it produced around 39,400 barrels of oil equivalent per day from 31 fields in 2008. Dana does not currently hold any acreage in Alaska.
“The acquisition of Bow Valley is directly in line with Dana’s successful strategy of growing reserves and production in its core operating areas through both exploration and acquisition,” Tom Cross, chief executive officer of Dana, said in a prepared statement. “Dana already has a working knowledge of the North Sea assets of Bow Valley which form a close fit with Dana’s existing North Sea portfolio.”
Another twist for Alaska The deal comes in the wake of weakening markets and maturing debt that led Bow Valley to form a special committee last year and hire acquisition and divestment firm Scotia Waterous to help examine various options ranging from partnerships to sale.
After months of deliberation, that process lead to the acquisition by Dana. The boards of directors of both companies have unanimously approved the deal, but lenders, company shareholders and Canadian regulators must approve it as well before it can be finalized.
Bow Valley plans to hold a special meeting with shareholders in mid-April.
If the acquisition is successful, its impact would likely ripple back to Alaska.
“I think it’s encouraging to see a company of that stature buying Bow Valley. It’s encouraging for the Alaska holdings, because that indicates that they’ve got the ability to fund the project moving forward,” said Jim Winegarner, vice president of land for BRPC.
BRPC hasn’t been in contact with Dana yet, but plans to in the future, Winegarner said.
The joint venture hoped to further delineate the North Shore and Sak River prospects in Gwydyr Bay this winter by drilling at least two wells and possibly a sidetrack. The joint venture is also permitting a third prospect in the area called West Shore.
After Bow Valley froze its interest in North Shore, BRPC assumed the company’s stake in the prospect and hoped to continue forward as planned, but a legal dispute with partner TG World Energy Corp. forced the joint venture to delay drilling at least one year.
The fourth partner in the joint venture is Nabors subsidiary Ramshorn Investments Inc.
| 