Centrica and Qatar Petroleum International (QPI) have agreed to acquire jointly a package of producing conventional natural gas and crude oil assets and associated infrastructure located in the Western Canadian Sedimentary Basin from Suncor Energy for C$1bn (US$980m) in cash. The acquisition is the first investment under the Memorandum of Understanding (MoU) signed between the two parties in December 2011.
The assets will be held in a newly established partnership between Centrica (60% share) and QPI (40% share), which will be operated by Centrica. The assets include proven and probable (2P) reserves estimated by the partners at 978 bcf (28 bcm, of which 90% natural gas), with estimated 2013 production of approximately 250 mcf/d (7.1 mcm/d), equal to 15 mboe/year.
The assets are located principally in South and Central Alberta where they overlap with existing Centrica assets, providing the opportunity for cost savings in production and development, and in North East British Columbia. The package also includes over 1 million acres of undeveloped land and there is significant potential for reserves and production upside through the use of horizontal drilling and multi-stage fracturing.