Page 6 - NorthAmOil Week 37 2022

NorthAmOil INVESTMENT NorthAmOil

Tamarack Valley to become largest Clearwater

producer with Deltastream acquisition

ALBERTA TAMARACK Valley Energy has agreed to current crude prices. The asset-level free funds
acquire privately held Deltastream Energy for flow breakeven point for the properties is esti-
CAD1.43bn ($1.07bn). The acquisition will mated at below $32 per barrel of West Texas
make Tamarack the largest producer in North- Intermediate (WTI).
ern Alberta’s Clearwater heavy oil play, where Tamarack also expects to benefit from syner-
activity has been booming. gies achieved through increased scale and exist-
In a statement, Tamarack said the purchase ing infrastructure at its Nipisi operations.
price would consist of CAD825mn ($622mn) “The acquisition of Deltastream solidifies
in cash, CAD300mn ($226mn) in the form of Tamarack as the largest producer in the Clearwa-
a deferred acquisition payment and a further ter oil fairway,” stated Tamarack’s president and
CAD300mn of equity comprised. The equity CEO, Brian Schmidt. “This transaction builds on
portion consists of around 80mn Tamarack the company’s core position in the Clearwater,
common shares at a price of CAD3.75 ($2.83) which is recognised as North America’s most
per share. economic play. Deltastream brings scale and a
Deltastream’s assets include average Clear- leading economic development drilling inven-
water production of around 23,000 barrels of tory, comprised of high-quality, long-life assets
oil equivalent per day (boepd) anticipated for with low sustaining capital requirements that
2023, with oil and natural gas liquids (NGLs) enhance capital allocation flexibility.”
accounting for 94%. Also included are over 500 Tamarack has been actively building up
net future development locations, across 184 net its asset base in the Clearwater, and closed its
sections of land adjacent to Tamarack’s core Nip- CAD93mn ($70mn) acquisition of privately
isi and Marten Hills assets. owned Rolling Hills Energy in June. Following
The company said Clearwater ranks as the the closing of the Deltastream deal, Tamarack
most economic play in North America, with expects to achieve average production of 68,000-
wells that pay out in less than six months at 72,000 boepd in 2023.™

Crestwood to make Marcellus midstream exit

WEST VIRGINIA CRESTWOOD Equity Partners has agreed to our balance sheet and improve financial flexi-
sell its gas-gathering and compression assets bility for unit repurchases and higher returning
in the Marcellus shale to Antero Midstream investment opportunities in our core areas,”
for $205mn in cash. The transaction represents stated Crestwood’s founder, chairman and CEO,
Crestwood’s exit from the region as the company Robert Phillips. “Over the past 18 months, Crest-
focuses on becoming a leading midstream oper- wood has strategically enhanced its asset portfo-
ator in the Williston, Delaware and Powder River lio to build competitive scale in its core basins,
basins. Crestwood noted that the assets, in West and as we focus on optimising and integrating
Virginia’s Doddridge and Harrison Counties, the Oasis Midstream, Sendero Midstream and
consisted of a legacy system that was acquired CPJV acquisitions, today’s announcement high-
in 2012. In recent years, the system has been lights our confidence in the portfolio achieving
affected by Crestwood’s anchor producer focus- our long-term leverage ratio target of sub 3.5x
ing development activity on the rich gas window in 2023 and demonstrates our commitment to
of the South-West Marcellus shale. As a result, generating accretive unitholder returns and
the company said, its assets had been in natural solidifying our financial flexibility for the future,”
field decline since 2017, as well as being non-core Phillips added.
to its long-term growth strategy. For Antero, meanwhile, the acquisition is
Crestwood intends to use the proceeds from expected to add nearly 425 undeveloped drill-
the sale to boost its financial flexibility through ing locations, as well as increase its compression
a combination of debt reduction and share capacity by 20% and its gathering pipeline mile-
repurchases. age by 15%.
“This timely and market-based divestiture “The acquisition is consistent with Antero
is another strategic transaction that highlights Midstream’s strategy of investing in infrastruc-
Crestwood’s long-term commitment to maxim- ture in the Marcellus, the lowest-cost shale play,
ising unitholder value through portfolio opti- for high visibility customers, particularly Antero
misation and redeployment of proceeds from Resources,” stated Antero’s chairman and CEO,
legacy non-core assets to further strengthen Paul Rady.™

P6 www. NEWSBASE .com Week 37 15•September•2022