U.S. firm sells Canada assets

Gary Park

Addison Energy, the unit of little-known, privately held Texas company Exco, is pulling up stakes in Canada, selling its assets to NAL Oil & Gas Trust for C$500 million.

NAL will hold 70 percent, spinning off 30 percent to a unit of Manulife Financial for C$165 million.

In making its largest acquisition yet, NAL will gain production of 7,700 barrels of oil equivalent per day, weighted 62 percent to natural gas, pushing its total to more than 20,000 boe per day, and add 117,000 gross undeveloped acres (53,000 net to the trust).

It will also boost its reserves by 29.1 million boe of proved and probable reserves, extending its reserve life index to 10.6 years from 8.6 years. The bulk of Addison’s assets were in central Alberta, close to NAL’s existing core areas of Sylvan Lake/Medicine River and Joffre. Based on its assumed commodity prices and a U.S.-Canadian dollar exchange rate, NAL anticipates its 2005 cash flow will grow by 15 percent.