Petronas enters JV in British Columbia Montney

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, June 3 -- Malaysia’s Petronas agreed to buy a working interest in three properties in the Montey resource play in northeastern British Columbia from Progress Energy Resources Corp. for $1.07 billion (Can.).

Progress Energy of Calgary agreed to sell 50% of its working interest in its Altares, Lily, and Kahta properties to Petronas in what the companies are calling the North Montney Joint Venture. Progress and Petronas intend to jointly consider opportunities to develop LNG export capacity in British Columbia.

Michael Culbert, Progress Energy president and chief executive officer, said Petronas has global expertise regarding LNG markets. The NMJV properties include five wells with minimal production at this time, he said.

Closing is subject to execution of a definitive agreements and regulatory approvals.

Terms call for Petronas to pay $267.5 million, or 25% of the transaction value total, at closing and the rest will come in the form of a capital carry with Petronas paying for future capital expenditures in the NMJV over the next 5 years to $802.5 million total.

The transaction provides Progress with the capital required to accelerate the development of its unconventional assets and unlock the value underlying its vast Montney land holdings, Culbert said.

Petronas and Progress also will establish an LNG Export Joint Venture of which Petronas will own 80%.

That JV will launch a feasibility study to evaluate building and operating an LNG export facility on the west coast of British Columbia. If finalized, Petronas would operate the facility.

The NMJV covers 149,910 acres in which Petronas will acquire a 50% interest and Progress Energy will be the operator. Progress holds 900,000 net acres of Montney rights over its entire British Columbia and Alberta land base.

PetroChina Corp. earlier this year announced plans to acquire half of Encana Corp.'s stake in Cutbank Ridge, a Montney resource play straddling the British Columbia and Alberta boundary, for $5.4 billion (Can.) (OGJ, Feb. 28, 2011, p. 18).

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Gasoline price games

03/24/2014 Let's assume you're a typical American, typically scornful of the oil and gas industry. You don't work for the industry. You don't know much about ...

OGJ Newsletter

03/24/2014

International news for oil and gas professionals

OMV acquires West of Shetland licenses from Hess

03/21/2014 OMV AG has reached an agreement with Hess Corp. to acquire four licenses in West of Shetland, UK, including Cambo field and the Blackrock prospect,...

Millennium Pipeline appoints president

03/20/2014 Millennium Pipeline Co. LLC has selected Joseph Shields as its president. He succeeds Rocco D’Alessandro, who held the position beginning in May 20...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected