Page 6 - NorthAmOil Week 09 2022

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Pembina, KKR to combine Canadian gas-

processing assets, make acquisition

WESTERN PEMBINA Pipeline announced on March 1 of this new joint venture is a natural extension of
CANADA that it had struck a deal with KKR to combine our relationship, unlocks value for Pembina and
their respective Western Canadian natural creates another growth platform.”
gas-processing assets into a new joint ven- Through the new joint venture, Pembina
ture. Additionally, the two companies will buy anticipates extending its reach to a wider asset
Energy Transfer’s Canadian gas-processing base across Western Canada, with the ability to
business in a transaction worth CAD1.6bn serve customers throughout the Montney and
($1.3bn). Duvernay plays in Alberta and British Columbia.
Combined, the deals have been valued at The company noted that through its increased
CAD11.4bn ($9.0bn). Pembina will own 60% in ownership in the Veresen Midstream assets, it
the new joint venture entity and will be its opera- would have greater exposure to growing gas vol-
tor and manager, while KKR’s global infrastruc- umes in Northeastern BC.
ture funds will hold the remaining 40%. Pembina said it anticipated receiving cash
The joint venture will include Pembina’s proceeds of roughly CAD700mn ($550mn).
field-based gas-processing assets, the Veresen About CAD550mn ($432mn) of this is expected
Midstream business – currently owned 55% by to be deployed for debt repayment, while roughly
funds managed by KKR and 45% by Pembina – CAD150mn ($118mn) will be spent on addi-
and Energy Transfer Canada (ETC). tional common share repurchases.
Funds managed by KKR already own a 49% The company expects the gas-processing
stake in ETC, and the Energy Transfer acquisi- capacity of the combined venture to be about 5bn
tion covers the remaining 51% stake. cubic feet (142mn cubic metres) per day, which
“Pembina has enjoyed a strong relationship is equivalent to about 16% of Western Canada’s
with KKR as a partner in Veresen Midstream total processing capacity. The name of the new
over the past four years,” stated Pembina’s pres- joint venture entity will be announced before the
ident and CEO, Scott Burrows. “The formation deal closes.™

INVESTMENT

PDC to buy Great Western for $1.3bn

COLORADO PDC Energy announced on February 28 that it to its current greenhouse gas (GHG) and meth-
had struck a deal to buy Great Western Petro- ane emission intensities while supporting its
leum for $1.3bn, including net debt of around 2025 and 2030 emission intensity reduction
$500mn. goals.
Great Western is owned by affiliates of EIG, “Coupled with our existing high-qual-
TPG Energy Solutions and the Broe Group. The ity inventory, this core Wattenberg acquisi-
company operates in Colorado’s Denver-Ju- tion adds meaningful scale to PDC while also
lesburg (DJ) Basin, with assets in what PDC demonstrating our commitment to – and con-
described as the core of the Wattenberg field. fidence in – the future of safe and responsible
The acquisition adds “significant scale” to PDC’s energy development in the state of Colorado,”
existing core Wattenberg position, the company stated PDC’s president and CEO, Bart Brook-
said. man. “This opportunity meets all the company’s
According to PDC’s statement, the acquisi- acquisition-related criteria we’ve previously
tion will add output of roughly 55,000 barrels of communicated by strengthening our free cash
oil equivalent per day (boepd), with crude com- flow, increasing our shareholder returns, hon-
prising 42% and liquids accounting for 67%. As ouring the balance sheet and adding competi-
of the end of 2021, proven reserves associated tive, high-quality inventory.”
with these assets were estimated at 185mn bar- Under the terms of the agreement, the
rels of oil equivalent (boe). acquisition will be financed through the issu-
The acquisition will also add 315 identified ance of around 4mn shares of common stock
locations to PDC’s inventory. Of these, 125 are to existing Great Western shareholders and
either drilled but uncompleted (DUC) wells or roughly $543mn in cash. PDC will use cash
approved permits, the company said. on hand and borrowings under its credit facil-
Illustrating the impact acquisitions can have ity to carry out the financing. The transaction
on a producer’s emissions profile and decarboni- is anticipated to close in the second quarter
sation plans, PDC also said the deal was accretive of 2022.™

P6 www. NEWSBASE .com Week 09 03•March•2022