Canadian Natural Resources Limited Announces The Acquisition of Certain Canadian Assets of Devon Canada
February 19 2014 - 5:00AM
Marketwired
Canadian Natural Resources Limited Announces The Acquisition of
Certain Canadian Assets of Devon Canada
CALGARY, ALBERTA--(Marketwired - Feb 19, 2014) - Canadian
Natural Resources Limited (TSX:CNQ)(NYSE:CNQ) ("Canadian Natural"
or the "Company") announces entering into an agreement relating to
the acquisition of Devon Canada's Canadian conventional assets,
excluding Horn River and the heavy oil properties, for an aggregate
cash consideration of $3.125 billion, effective January 1, 2014,
with a targeted closing date of April 1, 2014. The acquired lands
and production base are all located in Western Canada in areas
adjacent or proximal to Canadian Natural's current operations and
are high quality, concentrated liquids-rich natural gas weighted
assets, with additional light crude oil exposure. The current
estimated production, before royalties, from the acquired
properties is approximately 383 mmcf/d of natural gas, 10,800 bbl/d
of light crude oil and 12,000 bbl/d of NGLs and is approximately
72% operated. Along with the production are associated key
strategic facilities including 6 major owned and operated natural
gas plants, with gross processing capacity in excess of 1,000
mmcf/d, and 4 major owned and operated oil batteries. Finally, the
assets also include a high quality land base of approximately 2.2
million net acres of undeveloped land and 2.7 million net acres of
royalty and fee simple lands. Company Gross proved reserves
(excluding the royalty lands) associated with the acquisition, as
evaluated by an independent qualified reserves evaluator as at
December 31, 2013 using forecast prices and costs, were 272.2
million BOE.
The acquired asset package includes a royalty revenue stream
which is targeted to earn approximately $75 million in cash flow
during 2014. Canadian Natural is reviewing the options to combine
the acquired royalty revenue stream with its own royalty revenue
portfolio for either the creation of a new vehicle to provide
steady cash flow to current shareholders or monetization through a
sale package later in 2014. The targeted cash flow from the
combined royalty revenue streams is expected to be between $140
million and $150 million in 2014.
Commenting on the acquisition, Canadian Natural's President
Steve Laut stated, "This acquisition fits our strategy of
opportunistically adding to our existing core areas, where we can
provide immediate value, with the opportunity to add value in the
future. The acquired assets are largely operated, as are the owned
facilities and infrastructure; and are a very good fit with
Canadian Natural's existing assets and infrastructure. The combined
assets and infrastructure provide synergies to more effectively and
efficiently operate once fully integrated.
Additionally, this acquisition provides significant upside in
liquids-rich natural gas and light crude oil properties where we
already operate and have a strong understanding of the geology and
operating performance. The acquisition provides immediate value to
shareholders through production and cash flow, is accretive in
earnings, cash flow and returns, and maintains our strong financial
capacity to effectively execute our well defined plan."
The following table summarizes key metrics included in the
acquisition properties:
(Before Royalties) |
Proved reserves1 |
Forecast current production |
Natural gas |
1,130 bcf |
383 mmcf/d |
Natural gas liquids |
47.2 million bbl |
12,000 bbl/d |
Light crude oil |
36.8 million bbl |
10,800 bbl/d |
BOE |
272.2 million BOE |
86,633 BOED |
|
|
|
1 |
Company Gross proved
reserves using forecast pricing and costs, as evaluated by
Deloitte, an independent qualified reserves evaluator retained by
Devon Canada as at December 31, 2013. |
Approximately 900 Devon Canada employees will be joining the
Canadian Natural team, comprised of both field and head office
personnel.
Upon completion of the acquisition, Canadian Natural will
maintain its strong financial position with sufficient balance
sheet flexibility to accommodate the acquisition. In addition, the
Company has negotiated an additional $1 billion committed term
facility with the Bank of Montreal, which is available upon
closing. Balance sheet metrics, based upon current strip pricing,
are targeted to exit 2014 with debt to book capitalization at
approximately 30-31% (at low end of internal target) and debt to
EBITDA at approximately 1.05-1.15x (below internal target
range).
The transaction is subject to normal closing conditions and
government approval.
Canadian Natural is a senior oil and natural gas production
company, with continuing operations in its core areas located in
Western Canada, the U.K. portion of the North Sea and Offshore
Africa.
CONFERENCE CALL
A conference call will be held at 7:00 a.m. Mountain Time, 9:00
a.m. Eastern Time on Wednesday, February 19, 2014. The North
American conference call number is 1-800-766-6630 and the outside
North American conference call number is 001-416-340-8527. Please
call in about 15 minutes before the starting time in order to be
patched into the call.
A taped rebroadcast will be available until 6:00 p.m. Mountain
Time, Wednesday, February 26, 2014. To access the rebroadcast in
North America, dial 1-800-408-3053. Those outside of North America,
dial 001-905-694-9451. The pass code to use is 9119434.
WEBCAST
This call is being webcast and can be accessed on Canadian
Natural's website at www.cnrl.com. Presentation slides will be
available on Canadian Natural's website in PDF format shortly
before the live conference call webcast.
Certain information regarding the Company contained herein may
constitute forward-looking statements under applicable securities
laws. Such statements, including but not limited to statements
regarding reserves, forecast current production, cash flow from
royalty revenue assets and future plans related thereto, are
subject to known or unknown risks and uncertainties that may cause
actual results to differ materially from those anticipated or
implied in the forward-looking statements. Refer to our website for
complete forward-looking statements www.cnrl.com
Steve W. LautPresidentCorey B. BieberChief Financial Officer
& Senior Vice-President, FinanceDouglas A. ProllExecutive
Vice-PresidentCanadian Natural Resources Limited2500, 855 - 2nd
Street S.W.Calgary, Alberta, T2P 4J8Telephone: (403) 514-7777(403)
514-7888ir@cnrl.comwww.cnrl.com
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