Page 7 - NorthAmOil Week 50 2022

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Pembina, KKR to sell NGL pipeline stake

WESTERN CALGARY-BASED pipeline operator Pembina system. The sale is expected to close in the first
CANADA Pipeline’s joint venture with KKR & Co. has quarter of next year.
agreed to sell its 50% share in the Key Access Pembina also announced earnings guidance
Pipeline System (KAPS) to private equity of CAD3.5-3.8bn ($2.6-2.9bn) for 2023 and a
firm Stonepeak Partners for CAD662.5mn capital expenditure programme of CAD730mn
($484.8mn). The balance of the project will con- ($535mn) for the year. The company’s adjusted
tinue to be owned by Keyera. earnings in 2023 are expected to be influenced
The Pembina-KKR joint venture – Pem- by higher volumes and inflation-adjusted tolls
bina Gas Infrastructure (PGI) – was formed on its conventional pipelines and fractionation
in March when the two companies agreed to facilities. A full-year contribution from PGI as
merge their assets for Western Canadian gas well as higher volumes from PGI’s gas process-
processing. They also bought Energy Trans- ing assets are also expected to have an impact,
fer assets in Western Canada earlier this as are lower contributions from the Alliance and
year. Together, the deals were worth around Ruby Pipelines. This would be partially offset by
CAD11.4bn ($8.3bn). a higher contribution from the Cochin pipeline
Pembina owns 60% of the joint venture. owing to higher inflation-adjusted tolls, as well as
KAPS is a 348-mile (560-km) system of higher contributions from smaller assets.
pipelines that carries natural gas liquids (NGLs) A lower contribution from Pembina’s mar-
between Western Canada’s Montney and Duver- keting business, including a lower contribution
nay plays to Keyera’s facilities in Fort Saskatch- from crude marketing given the outlook for
ewan for processing. From there, the NGLs are lower prices and narrower price differentials,
sent to be exported to Asia. North American is also expected. Additionally, the company
NGLs are finding more of a market in Asia, as anticipates a lower contribution from NGL
demand grows with the energy transition and marketing owing to narrower margins because
with reduced imports from Russia. of lower NGL prices and a higher average cost
Keyera will continue to operate the pipeline of inventory.™

INVESTMENT

Crescent Point to buy Kaybob Duvernay assets

ALBERTA CRESCENT Point Energy has agreed to CAD200mn [$146mn] at current strip com-
buy Kaybob Duvernay assets in Canada modity prices.”
from Paramount Resources for CAD375mn Crescent Point intends to grow production in
($277mn). its Kaybob Duvernay assets from around 35,000
The Kaybob Duvernay acquisition in Alberta boepd in 2022 to more than 55,000 boepd within
will add 130 net locations and increase drilling its five-year plan. The company’s development
inventory in the play to more than 20 years, programme includes adding a second rig in the
Crescent Point said. The assets being purchased Kaybob Duvernay in 2024. Crescent Point is
are next to Crescent Point’s existing acreage. currently drilling its seventh pad in the play and
The new locations span nearly 65,000 net expects to bring its sixth fully operated pad on
acres (263 square km) of Crown land – with a stream in early 2023.
90% average working interest – with no expiries. Crescent Point’s fourth and fifth fully oper-
The assets currently produce more than 4,000 ated multi-well pads were recently brought
barrels of oil equivalent per day (boepd), of on-stream and are generating strong initial pro-
which 50% is comprised of liquids. They include duction (IP) results that are in line with, or ahead
a gas plant, associated pipelines, water infra- of, its internal-type wells.
structure and seismic data. The company has also successfully reduced
“We continue to generate strong full cycle drilling days to 11-13 days per well on its recent
returns from our Kaybob Duvernay assets, pads, an improvement of more than 40% since
which are top quartile within our overall port- entering the play.
folio,” said Crescent Point’s president and CEO, Crescent Point is increasing its first-quar-
Craig Bryksa. “Through this acquisition, we are ter 2023 base dividend by 25% to CAD0.10
increasing our drilling inventory in the play to ($0.07) per share, or CAD0.40 ($0.29) per share
over 20 years, based on current production. annually.
In addition, our land position will increase to Excess cash flow of CAD1.25bn ($915mn) is
approximately 400,000 net acres [1,619 square anticipated in 2023, at West Texas Intermediate
km]. We are also adding base production with (WTI) prices of $80 per barrel, based on annual
an estimated net present value of approximately production of 138,000-142,000 boepd.™

Week 50 15•December•2022 www. NEWSBASE .com P7