Advantage will retain the remaining 87.5% interest in the Glacier Gas Plant
Canada-based Advantage Oil & Gas has signed a definitive agreement to sell a 12.5% interest in the Glacier Gas Plant to a strategic partner for $100m in cash.
The transaction is expected to strengthen the company’s balance sheet during the time of volatility and support its ability to pursue opportunities and execute capital projects.
Advantage will retain the remaining 87.5% interest in the Glacier Gas Plant, which is one of the largest producer-owned gas processing facilities in Canada.
In addition to the sale, the company has also signed a 15 year volume commitment agreement with the purchaser for 50 million cf/d at a price of $0.66/mcf.
Advantage will operate and retain surplus capacity during the volume commitment term
Following its commissioning in 2010, the facility was expanded in six phases, increasing its capacity to 400 million cf/d raw gas and 6,800 bpd liquids capacity by 2018.
The plant features unique design, high operating run-times, zero venting, and advanced automation technology, complemented by the Glacier Acid Gas Sequestration project.
The Glacier Gas Plant processes production from Advantage’s Montney assets at Glacier, Valhalla and Progress through a network of owned pipelines, compressor stations and liquids hubs.
The company stated: “As commodity prices vary, Advantage maintains the optionality to redeploy capital to the assets with superior economics depending on the mix of gas, condensate and light oil, with no major infrastructure projects required.”
Advantage will operate the plant and retain all surplus capacity during the term of volume commitment.
The transaction is expected to be completed in July 2020, subject to customary closing conditions.
It is anticipated to enable Advantage to preserve its low-cost structure.