Bow Valley sells Canada assets

Bow Valley Energy Ltd. has sold its Canadian assets for C$74.25 million to an unnamed buyer, the company said April 30.

“The Canadian operations provided strong production and cash flow growth in the company’s early development but these assets now represent less than 15 percent of the company’s total proved plus probable reserves. With the significant growth of Bow Valley’s international operations, the Canadian asset was no longer strategic in our business plan. The net proceeds generated from the sale of the Canadian assets are intended to fund future growth opportunities in Bow Valley’s core operating areas of the U.K. North Sea and the North Slope of Alaska, both of which offer superior economic returns when compared to Canada,” said R.G. Moffat, Bow Valley president and CEO.

The Canadian holdings were concentrated in natural gas exploration and development acreage in a corridor extending from west central Alberta, through the Peace River Arch area and into northeastern British Columbia. Proved plus probable reserves for the Canadian fields totaled 3.8 million barrels of oil equivalent, with production of 660,000 barrels of oil equivalent last year.

After a strategic review, Bow Valley decided to concentrate on its core areas on Alaska’s North Slope and in the North Sea. It has 13.3 million barrels of proved plus probably oil equivalent in the North Sea. It has no reserves booked in Alaska so far.

On the North Slope, Bow Valley participated in two wells drilled this past winter by BRPC Group. North Shore No. 1 was drilled from onshore to a target under the Kuparuk River delta and encountered about 70 feet of oil pay in the Ivishak sandstone. The venture obtained 3-D seismic data for the area of the discovery and has cased the well as a potential producer. Another well, Sag River No. 1, found no hydrocarbons and was suspended for evaluation of a possible sidetrack next winter.

Proceeds of the Canadian sale will be used to retire Canadian debt of around $26.6 million and to finance other growth opportunities, the company said.

—Allen Baker