Manitok Energy Inc., Calgary, has completed the purchase of natural gas processing and production assets in the Carseland area of its conventional oil and gas reservoirs in southeast Alberta’s Entice lands (OGJ Online, Mar. 4, 2016).
Manitok finalized the deal with an unknown seller on Mar. 4 for a total cash consideration of $4.75 million prior to transaction costs and customary closing adjustments, the company said.
The acquisition includes a 14-MMcfd gas processing plant, 450 Mcfd net—or 75 boe/d net—of gas production, a gas gathering system that extends from the gas plant to the south end of the Carseland oil field, and 100% working interest in 5,760 acres of undeveloped land.
Ownership of the gas processing plant—which already was processing associated gas from Manitok’s oil production in the region—will enable the company to control the pace of development of its Carseland-area Lithic Glauc and Basal Quartz oil pools, as well as help to lower future operating costs by eliminating reliance on third-party facilities, Manitok said.
The purchase of existing gas processing plant and gathering system assets—which would have required an investment of more than $12 million to build as greenfield projects—additionally will save the company about $1.3 million in future pipeline costs, Manitok said.
Manitok, which immediately took over operatorship of the gas processing plant after closing on the deal, currently is working through engineering requirements for planned upgrades designed to boost the plants ability to handle a greater proportion of liquids, the company said.
The proposed upgrading project, which could cost up to $1 million, is scheduled to be completed before the end of second-quarter 2016, according to Manitok.
Contact Robert Brelsford at [email protected].