Keyera Corp., Calgary, will pay $133 million to Whitecap Resources Inc. for interests in gas processing in west central Alberta and in associated oil and gas reserves, Keyera reported. The company expects the acquisition to close on May 1.
As part of this agreement, Keyera will acquire:
• 85% ownership in the 78-MMcfd West Pembina 6-28 gas plant (the “Cynthia” gas plant).
• Varying ownership interests in oil batteries, compressors, and gathering pipelines associated with the gas plant.
• The 4.6% interest in the Bigoray gas plant Keyera doesn’t already own.
• Nisku reserves currently tied into the two gas plants.
The Cynthia plant sits in west central Alberta near Keyera’s Pembina North, Brazeau North, and Bigoray gas plants. It has a turboexpander capable of extracting a deep cut of ethane-rich NGLs from the raw gas stream. It also has acid-gas injection capability that enables it to handle sour gas.
Current throughput is about 46 MMcfd, said the company, and is largely associated gas and NGLs from Nisku oil production in the area. Upon closing, Keyera expects to become the plant operator. A maintenance turnaround scheduled for May will cost about $10 million, said Keyera.
Along with gathering and processing, Keyera is buying reserves from the Nisku geological horizon, with the associated wells producing into the Cynthia and Bigoray gas plants. Production from these wells averaged about 8,700 boe/d in 2013, said the announcement, of which about one-third was crude oil and NGLs and two-thirds natural gas.
Because the reserves are in the late stages of their life cycle, Keyera currently estimates the production decline rate to be 25-30%/year and has no plans to drill additional wells. The company also said that rights of first refusal exist on portions of the reserves and some surface assets associated with the production.
Keyera’s gas processing plants and associated facilities are in the west central, foothills, and deep basin natural gas production areas of the Western Canadian Sedimentary Basin. Its NGL and crude oil infrastructure, including pipelines, terminals, and processing and storage, as well as an iso-octane facility, are in Edmonton and Fort Saskatchewan.