Murphy Oil Company Ltd., the Canadian subsidiary of Murphy Oil Corp. (NYSE: MUR), closed the joint venture with affiliates of Athabasca Oil Corp. that was previously announced on January 27, 2016.
Under the terms of the JV, Murphy's subsidiary acquired a 70% operated working interest of Athabasca's production, acreage, infrastructure, and facilities in the Kaybob Duvernay lands, and a 30% non-operated WI of Athabasca's production, acreage, infrastructure, and facilities in the liquids-rich Placid Montney lands in Alberta. Total consideration amounts to C$486 million, including closing adjustments, of which Murphy will pay approximately C$267 million in cash at closing and the remaining C$219 million in the form of a carry over a period of four to five years. The transaction has an effective date of January 1, 2016.
"This new position in the Kaybob Duvernay and liquids rich Placid Montney complements our existing unconventional business in the Eagle Ford Shale and the Montney. Current net production is approximately 4,000 boe/d, which will add approximately 2,100 boe/d to Murphy's second quarter production. Over the remainder of 2016, we plan to spend approximately US$40 million on completions, infrastructure and facilities," said Roger W. Jenkins, president and CEO.