Page 12 - NorthAmOil Week 25

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Coastal GasLink awards contract to Aecon

BRITISH AECON has been selected by Coastal GasLink The activity scheduled for July is anticipated
COLUMBIA Pipeline to be the prime contractor for construc- to require up to 1,700 workers, with this number
tion of the Wilde Lake compressor and meter sta- rising to over 2,500 by the end of August.
tions, as well as the Kitimat meter station. These Progress on the pipeline will be closely
facilities are being built as anchor points along watched after opposition by the hereditary
the Coastal GasLink natural gas pipeline in Brit- chiefs of the Wet’suwet’en Nation to construc-
ish Columbia, which will serve the LNG Canada tion of the project through their traditional ter-
terminal – also currently under construction. ritory sparked Canada-wide demonstrations and
The announcement comes as Coastal Gas- blockades in February. The project is supported
Coastal GasLink is Link is preparing to launch its summer construc- by the First Nation’s elected chiefs, and the hered-
preparing to kick off its tion programme, and it has said that it will lay its itary chiefs reached a preliminary agreement
summer construction first pipe in July. with provincial and federal governments on
programme. Construction of the Wilde Lake facilities is how to move forward earlier this year. However,
also due to kick off in July, with work gradually the issues have not been fully resolved, and the
ramping up along the pipeline’s route and peak possibility of further protests along the pipeline’s
activity anticipated in September. The compa- route remains.
nies said that work over the coming weeks would The 416-mile (670-km) pipeline will have an
focus on environmental monitoring and field initial capacity of 2.1bn cubic feet (59.5mn cubic
work, grading, grubbing and workforce accom- metres) per day of gas, carrying it from the Daw-
modation establishment, which will be followed son Creek area of BC to Kitimat on the province’s
by pipe assembly and installation. They noted coast. TC Energy sold a 65% stake in the project
that the first in-field pipeline weld on the project to KKR & Co. and Alberta Investment Manage-
had taken place in Kitimat earlier this month. ment Co. (AIMCo.) last month.™

INVESTMENT

Talos announces acquisition,

borrowing base redetermination

GULF OF MEXICO TALOS Energy announced this week that it has 66% of this. The assets were producing around
made a bolt-on acquisition of 16 assets in the US 6,400 boe per day in the year to date up to May
Gulf of Mexico from affiliates of Castex Energy 31, with natural gas comprising about 85% of
2005 for $65mn. In the same press release, the output and oil accounting for the remaining
company said its borrowing base had been 15%.
reduced to $985mn following its semi-annual Talos noted that it was planning to hedge a
redetermination process. “significant” portion of total output from these
The revised borrowing base represents a assets between now and 2022 in order to lock in
reduction of around 14% from $1.15bn pre- favourable commodity pricing.
viously. The company noted that as of May 31, The company will pay for the assets through
it had roughly $121mn of cash on hand and the issuance of around 4.95mn common shares
$650mn drawn of the newly revised $985mn at closing and $6.5mn in cash. The transaction is
borrowing base under its credit facility. anticipated to close in the third quarter of 2020.
Castex emerged from bankruptcy protec- “The bolt-on acquisition includes addi-
tion in 2018 and is now controlled by its prior tional ownership in an attractive set of positive
first lien lenders. Talos said that it executed the cash-flowing assets in which we already have
agreement to acquire the Castex assets on June interests, and securing operatorship for the
19. The 16 assets involved in the transaction majority of these assets also provides us with
are all properties in which Talos already holds a greater control moving forward,” Talos’ pres-
working interest, and are all located in its Gulf of ident and CEO, Timothy Duncan, said. “This
Mexico Shelf core area. tactical deal with a compelling valuation high-
As of April 1, the assets had proven reserves lights the importance of continuing to remain
of around 17.6mn barrels of oil equivalent, with opportunistic and commercial in the current
proven developed reserves accounting for over environment.”™

P12 www. NEWSBASE .com Week 25 25•June•2020