Canadian income trusts fatten portfolios

Gary Park

Petroleum News Calgary Correspondent

Two of Canada’s 28 energy income trusts are bulking up on natural gas assets with two takeovers costing a combined C$154 million.

Crescent Point Energy Trust announced a deal to acquire an unidentified private Alberta-based company for C$81 million — C$77 million in cash and the assumption of C$4 million of net debt — to gain 6.4 million barrels of oil equivalent of established and 5.6 million boe of proven reserves.

Bonavista Energy Trust has agreed to pay almost C$73 million, including the assumption of net debt of C$2.2 million, to acquire TriQuest Energy, which produces 2,000 boe per day in Alberta, more than 90 percent derived from gas wells.

Subject to various approvals, Crescent Point expects to close its deal January 6, at which time its targeted 2004 production will grow to 8,750 boe per day from 7,000 boe.

The trust is also poised to offer 4.7 million units at C$12.75 to raise gross proceeds of C$60.6 million. The private company has three major properties in northeastern British Columbia and southern-central Alberta and more than 20,000 net acres of undeveloped land. Its reserve life index is rated at 10 years established and 8.8 years proven, with current output averaging 1,750 boe per day, including 9 million cubic feet per day of gas and 250 bpd of light crude.

One of the largest trusts, Bonavista has been on a fast-growth curve, completing a C$275 million acquisition of Taurus Exploration earlier this month to gain production of 7,800 boe per day (30 million cubic feet of gas and 2,800 bpd of oil and liquids), lifting its volumes by 22 percent to 42,800 boe per day, along with 252,000 net acres of undeveloped land.

Bonavista entered 2003 with reserves of 280 billion cubic feet of gas and 39 million barrels of oil and liquids, plus 867,500 net acres, mostly in Alberta.