Surge Energy to buy Saskatchewan tight oil assets from Cenovus

Surge Energy Inc. agreed to buy a tight oil asset in southern Saskatchewan from Cenovus Energy Inc. of Calgary for $240 million, with closing expected by mid-July, subject to normal closing conditions.

The agreement involves what Cenovus calls the Shaunavon asset, which involves 54 sections of land and currently produces 3,600 b/d. Previously, Cenovus said it was looking for buyers for its Bakken and Shaunavon assets. The Bakken assets remain unsold.

Last year, Cenovus said its oil production in Alberta increased 14% to more than 29,000 b/d as the company continued to focus on developing new tight oil plays on its existing lands in southern Alberta. Average oil production from the Lower Shaunavon and Bakken tight oil plays more than tripled compared with the same period last year to about 6,200 b/d due to a successful drilling program, although production continues to be affected by delays in facility construction (OGJ Online, July 25, 2012).