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Korean firm joins Cardium JV
Gary Park For Petroleum News
Mid-size oil and gas producer Bellatrix Exploration has added to the list of Asian investors ready to participate in the development of unconventional Canadian prospects, but has kept the wraps on the key details of the deal.
Its partner in a C$300 million joint venture is a South Korean firm which Bellatrix spokesman Troy Winsor said Jan. 22 has chosen not to disclose its identity.
Assuming the transaction closes on or before April 30, the Asian company will contribute C$150 million, or 50 percent, to participate in exploiting Bellatrix’s Cardium lands in west-central Alberta.
As a result, Bellatrix plans to increase its 2013 capital budget to about C$240 million from its earlier C$180 million, while targeting average production of up to 25,000 barrels of oil equivalent per day, exiting the year at about 31,000 boe per day. Based on latest field estimates, the company averaged about 19,600 boe per day in November.
Other Korean deals The deal is the latest involving South Korean companies in the Canadian energy sector.
Korea National Oil Corp. acquired Harvest Energy Trust for C$4.1 billion in 2009, giving it control of the BlackGold oil sands project and Harvest’s refinery in Newfoundland.
Korea Gas Corp. is a 20 percent partner in the Shell-operated LNG Canada project along with holding a joint-venture stake in the development of Encana gas properties in British Columbia and a 20 percent share of MGM Energy gas discoveries in the Mackenzie Delta.
Ken Mills, managing partner at the law firm of Blake Cassels & Graydon, said that although the Canadian government has basically closed the door to takeovers of oil sands companies by foreign state-owned enterprises, money will continue to flow from private Asian investors into the Canadian oil patch, predicting his firm is likely to be busy this year on the joint-venture front.
Assets in three provinces Bellatrix has assets in British Columbia, Alberta and Saskatchewan, with a major focus on the light oil Cardium play, which has been revived through horizontal drilling and multi-stage fracturing.
At the end of 2012, Bellatrix had about 207,000 net undeveloped acres and has identified more than 1,700 net drilling locations with capital requirements of C$8.17 billion based on an estimated 40 years of drilling.
The core Cardium and Notikewin/Falher properties have a combined inventory of 1,093 net drilling sites representing potential capital spending of C$4.34 billion.
The company added 7,000 acres of Cardium and Notikewin/Falher properties in December to provide 46 more locations in those two plays and 66 more net locations in the deeper Duvernay formation.
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