Page 6 - NorthAmOil Week 35 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

More progress towards Line

3 replacement start-up

NORTH AMERICA ENBRIDGE’S Line 3 replacement pipeline from filed by an indigenous group, is still pending.
Alberta to the US Midwest is inching closer to Separately, on September 1, Enbridge noti-
start-up, with more progress this week. fied oil shippers that it would offer capacity for
On August 30, a Minnesota appeals judge 620,000 barrels per day (bpd) on Line 3 starting
ruled that a state regulator did not violate Minne- in October. The news signifies the company’s
sota law when it issued a permit under the Clean growing confidence that the pipeline will now
Water Act (CWA) to Enbridge for the project. enter service in the coming weeks, following
Minnesota Court of Appeals Judge Tracy Smith delays related to the regulatory approval process
affirmed the permit, granted by the Minnesota and legal challenges.
Control Pollution Agency (MCPA), rejecting The initial capacity breaks down into 350,000
arguments by opponents that the regulator had bpd for light oil and 270,000 bpd for heavy
violated state-water quality standards because it crude, Reuters reported. The news service cited
did not study alternative routes. two sources familiar with the matter as saying
The decision marks the latest victory for Enbridge could begin filling the pipeline from
Enbridge in the face of a series of last-ditch September 15. Meanwhile, Canadian crude
efforts by opponents of the pipeline to have it traders reported oil price differentials tighten-
halted. A week earlier, the Minnesota Supreme ing in anticipation of the extra capacity entering
Court denied a petition by environmental and service.
indigenous groups seeking its review of a rul- The pipeline replacement will roughly double
ing that affirmed the Minnesota Public Utilities the capacity on Line 3 to 760,000 bpd at its peak.
Commission’s (PUC) approval of the project. Enbridge anticipates the pipeline to flow at full
At least one further lawsuit against the pipeline, capacity in the fourth quarter of this year.™

INVESTMENT

Enerplus whittles down

Williston Basin assets

WILLISTON ENERPLUS announced this week that it had “The sale of our legacy position in Montana
BASIN agreed to sell its interests in the Sleeping Giant and the Russian Creek acreage in North Dakota,
field of Montana and the Russian Creek area of properties which were not attracting capital in
North Dakota, both part of the Williston Basin. our portfolio, brings significant value forward
The definitive agreement is worth $115mn, and accelerates our debt reduction plans,” said
and the buyer has not been named. Enerplus also Enerplus’ president and CEO, Ian Dundas.
stands to receive up to $5mn in contingent pay- “We now estimate that we will achieve our
ments if West Texas Intermediate (WTI) prices CAD400mn [$317mn] debt reduction target by
average above $65 per barrel in 2022 and over the end of the first quarter of 2022, based on the
$60 per barrel in 2023. current commodity price environment. While
The sale comes as Enerplus continues to hone debt reduction remains our priority, we believe
its portfolio in the Williston Basin, which con- our shares are trading in an attractive price
tains the Bakken play. The company has made range, and as a result, we plan to direct approxi-
two purchases of Bakken assets earlier this mately 10% of the sale proceeds to incremental
year. It bought 151,000 net acres (611 square share repurchases.”
km) from Bruin E&P for $465mn and 78,700 Enerplus’ working interest production
net acres (318 square km) from Hess – some from the assets averaged roughly 3,000 barrels
of which were already contiguous to Enerplus of oil equivalent per day (boepd) from 244 net
assets – for $312mn. wells in the second quarter of 2021. Crude
The company said this week that the interests and natural gas liquids (NGLs) accounted for
it is now selling do not include any future drilling around 77% of this. The estimated 2022 net
locations in its identified Williston Basin inven- operating income associated with the inter-
tory. Proceeds from the sale will largely be used ests is roughly $22mn based on a WTI oil
to pay down debt. price of $60 per barrel.™

P6 www. NEWSBASE .com Week 35 02•September•2021