By OGJ editors
HOUSTON, May 8 -- Shell Canada Ltd. agreed to pay $2.4 (billion) Can. to acquire BlackRock Ventures Inc., which produces heavy crude oil in the Peace River and Cold Lake regions of Alberta.
Clive Mather, Shell Canada's president and chief executive officer, said the acquisition will add 12,000-14,000 b/d to its heavy oil production.
BlackRock has proved reserves of 142 million bbl and probable reserves of 67 million bbl. Its production target for yearend 2006 is 18,000-20,000 b/d escalating to 40,000 b/d by yearend 2009.
The BlackRock board unanimously approved the transaction and resolved to recommend that shareholders tender their common shares to Shell Canada's offer.
The offer is subject to regulatory approvals and other customary conditions, including the tendering of at least two thirds of BlackRock's outstanding common shares.
Assets
In the Cold Lake region, BlackRock plans Orion, a 20,000 b/d project with steam generators and more than 100 horizontal wells. The first phase calls for 10,000 b/d of production by the fourth quarter (OGJ, Jan. 24, 2005, p. 39).
The reservoir, in the Clearwater formation of the Cretaceous Mannville Group, has 20-30 m of homogeneous pay. The site is near Imperial Oil Ltd.'s 140,000 b/d thermal project.
Orion is expected to recover 191 million bbl of 10.5° gravity oil in 25 years. BlackRock has 100% interest.
In the Peace River region, BlackRock sharply boosted heavy oil production at Seal, Alta., 190 miles northwest of Edmonton.
First-quarter production at Seal was 10,367 b/d. BlackRock holds more than 80,000 net acres there. The reservoir is in the Cretaceous Bluesky formation at 625 m.
BlackRock also is a 55% partner with Talisman Energy Inc. in the Chipmunk project in Peace River involving 43,000 acres net to BlackRock. Nine wells have been drilled in the Mississippian reef play.