Page 20 - NorthAmOil Week 27

NorthAmOil NEWS IN BRIEF NorthAmOil

entered into a binding purchase and sale agree-
ment (PSA) for all the petroleum and infrastruc-
ture assets of Gain Energy, a private Canadian
company with operations in the Western Cana-
dian Sedimentary Basin (WCSB).
Highlights: During 2019, the Assets produced
at 11,020 boepd and generated about $34mn in
field EBITDA (revenues minus royalties, opex
and transportation) from 365 net wells across
multiple low-decline, long-life, light oil and gas
fields. The Assets would add 26.4 MMboe PDP
and 69.4 MMboe 2P reserves to i3’s portfolio.
The consideration to be paid for the Assets
is CAD80mn ($58.8m), subject to adjustments
(outlined below), representing acquisition met-
rics of approximately 1.7x 2019 field EBITDA,
$5,526/boepd, and $0.85/boe of 2P reserves
The Transaction is a reverse takeover under
the AIM Rules for Companies and is subject to i3
shareholder approval. The Company’s shares are
currently suspended from trading on AIM until
it either publishes a Readmission Document
various government emergency relief programs, interests in Alaska, and BP Pipelines (Alaska) detailing the Transaction or provides confirma-
to improve its short-term liquidity and mitigate Inc.’s interest in the Trans Alaska Pipeline Sys- tion that the Transaction will not complete.
risks associated with the decrease in demand for tem (TAPS). BP and Hilcorp continue to work On July 3, 2020, i3 entered a binding purchase
the Company’s services. with regulators to complete the midstream sale, and sale agreement with Gain to acquire 100%
Although the balance of 2020 is clouded with including transferring BP’s interest in TAPS. of its producing and non-producing petroleum
risk and uncertainty, there is optimism for the William Lin, executive vice president for assets in the Canadian provinces of Alberta and
long term. Major infrastructure spending has regions, cities and solutions, said: “Today marks Saskatchewan. In Q4-2019, the Assets produced
been announced by provincial and federal gov- a new era for Prudhoe Bay. It is a world-class on average 10,645 boepd (47% liquids) to which
ernments that should have significant positive field and Hilcorp is well-positioned to take it Gain’s independent reserve evaluator had attrib-
impacts on the western Canadian economy. into the future and maximise value for the State uted PDP reserves of 26.4 MMboe with a before-
Additionally, several major oil and gas pipelines, of Alaska. We wish them the very best for this tax NPV10 of about $177mn and 2P reserves
including Trans Mountain, Costal Gas Link and next phase of Prudhoe Bay’s long life.” of 69.4 MMboe with a before-tax NPV10 of
Keystone XL have cleared major hurdles and In April, BP confirmed its commitment to about $397mn. In 2019, the Gain Assets pro-
opposition. The service companies in our indus- completing the sale, adjusting the financial terms duced about $34mn in field EBITDA (revenues
try that can survive and recover from COVID- of the agreement to reflect current market con- minus royalties, opex and transportation) from
19, will be well positioned to benefit from these ditions while retaining the overall consideration 242 Gain-operated wells at an average working
projects and participate in building a sustainable of $5.6bn. interest of 78% and 1,633 non-operated wells at
economic future in western Canada. Janet Weiss, regional president, BP Alaska, an average working interest of 11% and include
Cordy Oilfield Services, July 07 2020 said: “I am proud of our employees and contrac- 174,000 net developed acres (704 square km)
tors, who have done extraordinary work to make and 186,000 net undeveloped acres (753 square
this a safe and seamless transition. Thank you. km) of land. As part of i3’s readmission process,
INVESTMENT And to the State of Alaska, we deeply value our the Company has commissioned GLJ Ltd. to
role in Alaska’s history, and thank the governor update the reserves associated with the Assets.
BP completes sale and his team for positioning Prudhoe Bay for These details will become part of i3’s Readmis-
sion Document when published.
many more years of competitive production.”
of upstream Alaska BP, July 07 2020 free of all encumbrances (apart from indus-
Under the PSA, i3 will be acquiring the Assets
business to Hilcorp Canada: i3 Energy issues try standard or acceptable permitted encum-
brances) for cash consideration of CAD80mn
BP has completed the sale of its upstream Alaska update on Gain Energy (about $58.8mn). In addition to normal interim
business to Hilcorp and operations of the Prud- period adjustments between the transaction
hoe Bay oil field have been transferred to Hil- production acquisition effective date of May 1, 2020, and comple-
corp. The upstream assets comprise the vast tion, the Consideration will be adjusted by an
majority of the deal value. i3 Energy, an independent oil and gas com- amount of interest accruing at Canadian Prime
In August 2019, BP announced it would exit pany with assets and operations in the UK, + 2% (totalling approximately 4.45%), and from
Alaska, selling its business to Hilcorp for a total has announced an update on the previously June 29, 2020, until completion, the Consider-
consideration of $5.6bn. The sale includes BP’s announced Gain Energy production acquisition ation will be adjusted by CAD500,000 (about
entire upstream and midstream business in the In reference to the Company’s announce- $368,000) per calendar month accruing to com-
state, including BP Exploration (Alaska) Inc., ment of June 23, 2019, regarding the Letter of pensate Gain for its management of the Assets.
which owns all of BP’s upstream oil and gas Intent to acquire production assets, i3 has now i3 Energy, July 06 2020

P20 www. NEWSBASE .com Week 27 09•July•2020