Birchcliff Energy Ltd. has agreed to acquire 100% of fellow Calgary firm Encana Corp.’s Gordondale assets in northwestern Alberta for $625 million (Can.) in cash. The deal is effective Jan. 1, and expected to close by July 28.
The acquisition covers 91,833 gross (54,206 net) acres of land and associated infrastructure within Birchcliff’s Montney-Doig natural gas resource play in the Peace River Arch area of Alberta. Of that total, 46,233 gross (40,920 net) acres are core Montney lands with an average working interest of 89%.
Birchcliff says the assets include a large contiguous land base that fits between the firm’s existing Pouce Coupe and Gordondale properties. The properties feature 993 gross (929 net) potential future drilling locations, and 54 million boe of proved developed producing reserves, 106 million boe of proved reserves, and 191 million boe of proved plus probable reserves, an increase of 33%.
Forecast production from the assets for this year’s first half is 26,000 boe/d, of which 41% is oil and natural gas liquids. The assets have a base production decline rate of 20%, and limited new wells have been brought on production in recent years, with the last wells drilled in 2014.
On closing, Birchcliff will have a Montney-Doig land position of 263,151 gross (251,950 net) acres, including 145,106 gross (140,695 net) acres of undeveloped land.