The acquisition is expected to complement IPC’s current southeast Alberta operations
Canadian oil and gas company International Petroleum has signed an agreement to acquire Granite Oil for approximately $59m.
The transaction includes total proved plus probable (2P) reserves of 14 million barrels of oil equivalent (MMboe) and 6.2MMboe of unrisked contingent resources, as of 31 December 2019.
The acquisition is expected to complement IPC’s current southeast Alberta operations.
IPC CEO Mike Nicholson said: “We are very excited to announce our third acquisition of high quality operated assets in less than three years since IPC was created. The acquisition of Granite provides access to a new resource play fairway that adds additional reserves, resources and production of long life, high margin light oil with significant growth potential.
“We believe that we can more than double current production levels within the next three years, more than fully funding this growth with the cash flows generated from these assets.”
Light oil producing assets of Granite Oil are in the Milk River area of Alberta
IPC said that the high netback, light oil producing assets located in the Milk River area of Alberta, which produce approximately 1,500 barrels of oil per day (bopd) of 29° API oil, from an oil pool which extends over a 50km fairway are included in the transaction.
The assets are equipped with existing infrastructure to enable the current gas injection enhanced oil recovery (EOR) scheme, and are capable of facilitating further field development opportunities.
In addition, the acquisition also includes the associated oil and gas processing and injection facilities located in proximity to key sales points.
Once the transaction is completed, all of the Granite Oil’s current production and infrastructure will be transferred to the 100% ownership and operatorship of IPC.
The closing of the transaction, subject to customary closing conditions including approvals from the Granite shareholders, the Court of Queen’s Bench of Alberta and applicable stock exchange and regulatory authorities, is expected in early March 2020.