The transaction is part of the Tourmaline’s ongoing consolidation strategy for North Montney
The Black Swan acquisition is expected to complement Tourmaline’s core Gundy Development. (Credit: Anita starzycka from Pixabay)
Canada’s Tourmaline Oil has signed an agreement to acquire privately owned Black Swan Energy for C$1.1bn ($908.7m), including the assumption of $288n debt.
The transaction is part of the Tourmaline’s ongoing consolidation strategy for North Montney, which the company sees as an important sub-basin to supply Canadian LNG.
The natural gas producer expects the North Montney to emerge as a major growth driver in the entire Western Canadian Sedimentary Basin for the next decade.
The transaction is expected to support Tourmaline in becoming a 500,000 barrels of oil equivalent per day (boepd) company during 2022, with anticipated mid-2022 gas production of 2.25-2.30 billion cubic feet per day (bcf/day).
Tourmaline stated: “The Black Swan acquisition complements Tourmaline’s core Gundy development and, along with the more recent Polar Star, Chinook, and Saguaro transactions, will establish Tourmaline as the largest current North Montney producer with the most extensive future drilling and project inventory.
“As a Senior Canadian producer, Tourmaline now expects to average approximately 500,000 boepd of production by mid-2022.”
Upon completion of the transaction, Tourmaline is expected add average production of over 50,000boepd.
The acquisition also includes existing 2P reserves of 491.9 million boe, 1,600 Montney horizontal internally estimated drilling locations, and 230,000 net acres of Montney rights.
All the reserves included in the transaction are located in the Aitken core development area.
With the acquisition, Tourmaline will also add key gas processing and transportation infrastructure that comprises operatorship and 50% working interest in the two new Black Swan gas plants at greater Aitken.
The Black Swan acquisition is expected to complement Tourmaline’s core Gundy Development, expanding its North Montney production to approximately 175,000boepd during 2022.
Tourmaline’s Gundy Phase 2 expansion is anticipated to start production in January 2022.
Subject to regulatory approvals, the transaction is expected to be completed in the second half of July 2021.
Scotia and Stifel FirstEnergy served as financial advisors to Tourmaline on the transaction, while Peters & Co. acted as financial advisor to Black Swan.
In November last year, Tourmaline announced the acquisition of Canadian natural gas company Jupiter Resources in an all-stock deal worth around CAD626m ($476.3m).