Page 9 - NorthAmOil Week 14 2021

NorthAmOil INVESTMENT NorthAmOil

Whitecap agrees to buy

Kicking Horse for $238mn

WESTERN CANADA’S Whitecap Resources announced 32% – about 90% of this is condensate. Whitecap
CANADA this week that it had struck a deal to acquire Kick- said it would raise this to 18,000-19,000 boepd
ing Horse Oil & Gas for CAD300mn ($238mn) over the next 12-15 months and maintain it at
in cash and shares. The acquisition is aimed at that level over 2022-26 by drilling 8-10 wells per
enhancing Whitecap’s position in the Montney year in an effort to maximise free funds flow.
play, which spans British Columbia and north- Whitecap said its total Montney acreage was
ern Alberta. now 168 sections, or 118.0 on a net basis, with
Whitecap said in an April 5 statement that it 696 drilling locations, or 437.4 on a net basis,
would pay for the acquisition with a combination identified across numerous benches of the play.
of 34.5mn shares and CAD56mn ($44mn) in News of the acquisition comes a week after
cash. The transaction also includes the assump- Whitecap announced that it was raising its pro-
tion of Kicking Horse’s net debt, which was esti- duction guidance for 2021 to roughly 102,000-
mated at CAD54mn ($43mn) as of February 28. 103,000 boepd, compared with a prior forecast
Kicking Horse is a privately held indirect sub- of 100,000 boepd. This comes after the company
sidiary of Quantum Energy Partners. The com- integrated two other recent acquisitions – NAL
pany’s assets are located in the Alberta portion Resources and TORC Oil & Gas – into its oper-
of the Montney and primarily consist of a con- ations at the start of 2021. Whitecap’s previous
densate-rich development at Kakwa. Whitecap capital expenditure guidance of CAD280-300mn
said the assets would complement its existing ($222-238mn) for the year remains unchanged.
Montney position at Karr and have “significant The company also cited improvements to
offsetting activity”. its base production decline rate, as well as “out-
Current production from the Kicking Horse standing” results from its first-quarter drilling
assets is around 8,000 barrels of oil equivalent per programme, as being behind higher-than-ex-
day (boepd), with liquids accounting for roughly pected output in the first quarter of this year.™

Sempra to sell infrastructure

unit stake to KKR for $3.4bn

US-MEXICO US-BASED Sempra Energy said this week that deal, it said this week.
it had agreed to sell a 20% interest in its Sempra “Over the past few years, there’s been a gen-
Infrastructure Partners unit to global investment eral move from utilities to focus more on their
firm KKR for $3.37bn in cash. traditional domestic utility business and [place]
The deal comes four months after Sempra less emphasis on their international business,” a
announced that it would form the energy infra- Glenrock Associates analyst, Paul Patterson, was
structure unit in an effort to simplify its business. quoted by Bloomberg as saying. The news ser-
The Sempra unit’s The company said at the time that it intended to vice also cited a Raymond James analyst, Pavel
assets include LNG sell a non-controlling stake in Sempra Infra- Molchanov, as saying selling the stake also set a
projects in the US and structure Partners in order to fund growth and market value for Sempra’s infrastructure unit.
Mexico. “highlight the underlying value of the platform”. “That means that Sempra’s banks, its lend-
Sempra combined its Sempra LNG business ers, can look at this and perhaps improve how
and its Mexican subsidiary, IEnova, into the new they think about the company’s balance sheet,”
infrastructure unit. The unit’s assets include the he said.
operational Cameron LNG export terminal on “Over the next decade, we expect the energy
the US Gulf Coast, as well as the Energía Costa markets in North America to continue to grow
Azul LNG project, which is currently under con- and become increasingly integrated. Combining
struction on Mexico’s Pacific Coast. our resources with KKR improves our ability to
Sempra launched the infrastructure unit as capture new investment opportunities in cleaner
a self-funding platform, as it focuses more on forms of energy and the critical infrastructure that
its US utility business. The sale of the stake to stores and transports it,” stated Sempra’s chairman
KKR values Sempra Infrastructure Partners at and CEO, Jeffrey Martin. “This transaction also
about $25.2bn, including expected asset-re- sends a clear signal about the value and expected
lated debt worth $8.37bn at the closing of the growth of our infrastructure portfolio.”™

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