Page 9 - NorthAmOil Week 15 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Biden administration decision

gives Dakota Access a boost

US MIDWEST THE Dakota Access oil pipeline received a administration’s decision provides some breath-
boost last week, when the administration of US ing space. It is also welcome news for producers
President Joe Biden said it would not force the in the Bakken that rely on the 570,000 barrel
pipeline to be shut down while federal regula- per day (bpd) pipeline to ship their output to
tors carry out a new environmental review on market.
the project. Last year, US District Judge James Boasberg
The fight over Dakota Access’ future contin- ordered the US Army Corps of Engineers to
ues, with opponents of the project awaiting a conduct a new environmental impact review
court ruling that could still result in the pipeline on Dakota Access, and subsequently decide
being shut down, possibly in the coming weeks. whether the project could keep operating based
However, a Department of Justice (DoJ) lawyer, on the updated findings.
Ben Schifman, told the US District Court for the Boasberg also initially issued a shutdown
District of Columbia that while the federal gov- order for the pipeline, but this was overturned
ernment had the authority to take enforcement by an appeals court a month later. Dakota Access
action against Dakota Access – which could can thus keep operating while the Army Corps
include a shutdown – it would not do so “at this carries out its review – barring any new legal
time”. victories for the pipeline’s opponents, or federal
The decision by the Biden administration not intervention, which has been ruled out for now.
to intervene in the Dakota Access case comes as The new environmental impact statement (EIS)
a relief to the oil industry, following the admin- is expected to be published in March 2022.
istration’s immediate action to stop the Key- In the meantime, Energy Transfer is also con-
stone XL pipeline upon taking office in January. tinuing to dispute the court decision that revoked
While the path forward is not straightforward an easement for Dakota Access and resulted in
for Dakota Access operator Energy Transfer, the the new environmental review being required.™

INVESTMENT

Tamarack Valley makes another acquisition

ALBERTA CANADA’S Tamarack Valley Energy The Anegada assets include over 200 net
announced this week that it had struck a deal to future drilling locations across 332.4 sections, or
acquire privately owned Anegada Oil for roughly 321.2 on a net basis, of Charlie Lake land. Tam-
CAD494mn ($4396mn) on a net basis. arack said this would support current produc-
The price tag factors in the deduction of tion levels for more than 10 years. The company
the proceeds from the sale of a 2% newly cre- is planning to raise output at the properties to
ated gross overriding royalty (GORR) on the 12,000-13,000 boepd in 2022, and maintain it at
acquired assets. Tamarack agreed to sell this this level.
GORR to Topaz Energy – a company created by The transaction comes less than a month
Tourmaline Oil to hold petroleum processing after Tamarack closed two other acquisitions,
and handling assets – for CAD32mn ($26mn). in the Provost and Nipisi areas of Alberta.
Taking the GORR sale into account, These assets were acquired for a combined
Tamarack will pay for the transaction with price of CAD135.3mn ($108.3mn) after
CAD247.5mn ($198.2mn) in cash and debt, as deducting the proceeds from the sale of two
well as roughly 105.3mn common shares at a 4.0% GORRs on a portion of the Nipisi prop-
price of CAD2.34 ($1.87) per share. erties, again, to Topaz.
Anegada is a pure play light oil producer in Analytics firm Enverus noted that Tamarack
the Charlie Lake area of north-western Alberta, had increased its 2021 free adjusted funds flow
with output of around 11,800 barrels of oil equiv- forecast to roughly CAD122.5mn ($98.0mn),
alent per day (boepd). Tamarack said in an April up 40% on the previous guidance. The increase
12 statement that Charlie Lake is considered to is anticipated to go towards strengthening Tam-
be “among the most economic plays in North arack’s balance sheet and potential accretive
America”, with wells that pay out in around six mergers and acquisitions (M&As), Enverus said.
months and generate internal rates of return This suggests that Tamarack’s spending spree on
(IRRs) of above 400%. new assets is not yet over.™

Week 15 15•April•2021 www. NEWSBASE .com P9