Harvest Operations Acquires BlackGold Oilsands Project From Korea National Oil: Harvest Operations is Expanding its Oil Sands Business - Deal Analysis From GlobalData
Harvest Operations Corp. (Harvest) has completed the acquisition of BlackGold Oil Sands Project, from Korea National Oil Corporation (KNOC), for a purchase consideration of CAD 374m ($368.4m). The acquisition was financed by Harvest with the issuance of shares to KNOC.
BlackGold Oil Sands Project is located in northeastern Alberta near Conklin and is in close proximity to a number of major oil sands developments. The project has Energy Resource Conservation Board (ERCB) approval for a Phase 1 project of 10,000 bpd and has made an application for a Phase 2 project that would increase production to 30,000 bpd.
The project had 259 mmboe of proved and probable (2P) reserves on December 31, 2009 as determined independently by GLJ Petroleum Consultants Ltd (GLJ Petroleum) in accordance with National Instrument 51-101 and an incremental 30 million barrels (MMBbl) of best estimate contingent resource.
Project cost for the first phase (2010-2012) of production up to 10,000 bpd is estimated to be in between CAD 450 ($443.28) m – CAD 500 ($492.54) m which includes drilling cost of 15 Steam Assisted Gravity Drainage (SAGD) well pairs for start up. The steam generation and fluid processing facility is fixed at a cost of CAD 312m ($307.34m).
The transaction implies a deal value of $1.42 per boe of 2P reserves.
- Rationale behind Harvest Operations acquiring BlackGold Project from KNOC
- Strategic Benefits for the companies involved
- Geography covered -Canada
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