Page 8 - NorthAmOil Week 07 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Energy Transfer to acquire Enable Midstream

US ENERGY Transfer has entered into an agree- businesses. Notably, Energy Transfer will
ment to acquire Enable Midstream in an all- acquire gas-gathering and processing assets in
stock transaction valued at around $7.2bn. The the Anadarko Basin in Oklahoma and will inte-
acquisition will make Energy Transfer – already grate “high-quality” assets with its existing NGL
one of the biggest pipeline companies in the US transportation and fractionation operations on
– nearly 40% larger. the US Gulf Coast. Also included in the deal
Under the terms of the agreement, Enable are gas-gathering and processing assets in the
shareholders will receive 0.8595 Energy Trans- Arkoma Basin and Haynesville shale play.
fer common units for each Enable common unit, The companies expect that the deal will
based on the 10-day volume-weighted average enhance Energy Transfer’s access to “core mar-
price of both companies’ shares on February kets with consistent sources of demand” and will
12. In addition, each outstanding Enable Series bolster its portfolio of “customers anchored by
A preferred unit will be exchanged for 0.0265 large, investment-grade customers with firm,
Series G preferred units of Energy Transfer, the long-term contracts”.
companies said in a joint February 17 statement. Energy Transfer anticipates that the com-
The transaction will also include a $10mn bined company will generate more than $100mn
cash payment for Enable’s general partner. of annual run-rate cost and efficiency synergies,
Energy Transfer said the deal would further excluding potential financial and commercial
its efforts at paying down debt, as it was expected synergies. The potential commercial synergies
to be “immediately accretive to free cash flow include incremental earnings, which may result
[FCF] post-distributions, have a positive impact from integrating Enable’s Anadarko gathering
on credit metrics and add significant fee-based and processing complex with Energy Transfer’s
cash flows from fixed-fee contracts”. fractionation assets on the US Gulf Coast, the
The acquisition will also increase Energy companies added.
Transfer’s footprint across various regions Financial services firm UBS commented that
and provide increased connectivity for its gas the expected synergies should win investors over
and natural gas liquids (NGLs) transportation despite the deal’s overall price tag.™

INVESTMENT

Crescent Point to buy Kaybob Duvernay

assets from Shell Canada

ALBERTA CALGARY-BASED Crescent Point Energy has 2021. Nonetheless, Crescent Point will target a
struck a deal to buy Kaybob Duvernay shale lower decline rate and longer-term production
assets in Alberta from Royal Dutch Shell’s Cana- of roughly 30,000 boepd once it takes over the
dian unit for CAD900mn ($707mn). assets.
The companies said in separate February 17 The transaction marks Crescent Point’s entry
statements that the transaction would comprise into the Kaybob Duvernay, which it described
$550mn in cash and 50mn Crescent Point shares as a “premier and established liquids-rich play
worth $157mn. with greater than 10 years of high-return, low-
The sale includes roughly 450,000 net acres risk drilling inventory”.
(1,821 square km) in the Fox Creek (Kaybob) For Shell, the transaction is the latest in a
and Rocky Mountain House (Willesden Green) series of sales as the super-major sheds non-core
areas, as well as related infrastructure. The assets assets. Shell also sold most of its Alberta oil sands
currently produce around 30,000 barrels of oil operations in 2017.
equivalent per day (boepd) from more than 270 “Divesting these assets underpins Shell’s
wells, consisting of 57% condensate, 8% natural effort to focus the upstream portfolio to deliver
gas liquids (NGLs) and 35% shale gas. Crescent cash,” Shell’s upstream director, Wael Sawan,
Point noted that prior to the expected closing said of the latest transaction. “While we believe
of the acquisition in April, Shell is planning to these assets hold value, the divestment allows
bring a number of drilled and uncompleted us to focus on our core upstream positions like
(DUC) wells online. As a result, production the Permian Basin, with integrated value chains,
from the assets is expected to increase to around thereby building a resilient, lower-risk and less
35,000 boepd during the second quarter of complex portfolio.”™

P8 www. NEWSBASE .com Week 07 18•February•2021