Income trust negotiates C$175 million takeover of Birchill

Gary Park

Petroleum News Calgary correspondent

Shiningbank Energy Income Fund has fattened its portfolio by entering an agreement to take over privately held Birchill Resources for C$175 million.

If the transaction closes next month, the income trust will gain production of 4,600 barrels of oil equivalent per day, approximately 65 percent of it natural gas, with reserves of 2.55 million barrels of oil, 52.3 billion cubic feet of gas and 2.73 million barrels of natural gas liquids. The estimated combined reserves of 13.99 million boe are 21 percent lower than the 17.6 million boe calculated by Birchill’s independent engineers.

With 71 percent proven, the reserves have an estimated reserve life index of 8.3 years and will cost C$38,000 per flowing boe.

In addition, Shiningbank will acquire significant development drilling opportunities and 72,300 net acres of undeveloped land in Alberta and Saskatchewan.