Athabasca Oil Company has closed transaction agreements with Cenovus Vitality Inc. to create Duvernay Vitality Company, a standalone self-funded entity concentrating on sturdy, excessive netback money move and manufacturing development centered on the Kaybob Duvernay useful resource play in Alberta, Canada.
Duvernay Vitality’s property are composed of Athabasca’s current Duvernay property, Athabasca’s new 100% working curiosity Duvernay property, and Cenovus’ 100% working curiosity Kaybob Duvernay property.
Athabasca will handle Duvernay Vitality with a 70 p.c fairness curiosity, whereas Cenovus owns the remaining 30 p.c fairness curiosity. The transaction has an efficient date of January 1, Athabasca mentioned in a latest information launch.
The creation of Duvernay Vitality is “designed to reinforce worth for Athabasca’s shareholders by offering a transparent path for self‐funded manufacturing and money move development within the Kaybob Duvernay useful resource play”, the corporate mentioned, including that it’ll not compromise its “capability to fund capital in its Thermal Oil division or its return of capital technique”. Athabasca reiterated that the brand new firm would have impartial methods and capital allocation frameworks.
Duvernay Vitality’s present manufacturing is round 2,000 barrels of oil equal (boepd) consisting of 75 p.c liquids. Its 2024 manufacturing steering is roughly 3,000 boepd. Growth plans are underway and are anticipated to drive sturdy manufacturing momentum into 2025 with estimated manufacturing of roughly 6,000 boepd, in response to the discharge. Assuming a “constructive commodity worth outlook”, Duvernay Vitality has self‐funded development potential to round 25,000 boepd by the late 2020s.
The brand new entity’s 2024 capital program is estimated at round $60.9 million (CAD 82 million) and consists of the drilling of 12 gross Duvernay wells. This system consists of 5 internet 100% working curiosity (WI) wells and a couple of.1 internet 30 p.c WI wells on the three way partnership lands. Athabasca mentioned the capital will probably be funded via preliminary seed capital and money move from current operations.
Duvernay Vitality not too long ago rig launched a two-well pad at 03‐18‐64‐17W5 with a mean horizontal size of round 13,615 ft (4,150 meters) per properly. Completion operations are deliberate for the primary quarter with on‐stream timing on the finish of the second quarter. Additional, a three-well pad is anticipated to spud in February with completions and tie‐in to observe within the spring, in response to the discharge.
Duvernay Vitality can have seed capital of $29.98 million (CAD 40 million) and a $37.47 million (CAD 50 million) new credit score facility led by ATB Monetary.
In whole, Duvernay Vitality can have publicity to round 200,000 gross acres within the liquids-rich and oil home windows with about 500 gross future properly places. The property are serviced by current infrastructure together with two operated oil batteries with a fuel pipeline community related to each the Pembina Fuel Infrastructure KA facility and the Keyera Simonette facility. The liquids are instantly related to the Pembina Peace liquids system. Duvernay Vitality may even personal an 8.1 p.c working curiosity within the 7-4-63-16W5 fuel facility, in response to an earlier assertion.
In the meantime, Athabasca mentioned its Thermal Oil division will keep its $100.2 million (CAD 135 million) capital price range and can have 2024 manufacturing steering of 32,000 to 33,000 barrels per day.
Athabasca is a Canadian power firm located in Alberta’s Western Canadian Sedimentary Basin with a centered technique on the event of thermal and lightweight oil property.
Cenovus describes itself as an built-in power firm with oil and pure fuel manufacturing operations in Canada and the Asia Pacific area, and upgrading, refining and advertising and marketing operations in Canada and the USA.
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