Athabasca Oil Corp. has agreed with the Canadian unit of Murphy Oil Corp. to jointly develop the Duvernay and Montney in the Kaybob area in west-central Alberta. The transaction is valued at $475 million (Can.)
Athabasca is selling 70% interest in production, acreage, and infrastructure in the Greater Kaybob area as Murphy will assume operatorship of about 200,000 acres of prospective Duvernay land. December gross production averaged 6,900 boe/d, of which 58% was liquids (OGJ Online, Nov. 28, 2012).
Nearby to the southwest, Athabasca is selling a 30% interest in production, acreage, and infrastructure in the Greater Placid area. Athabasca will be operator of the Montney in this area, which includes about 60,000 acres of prospective Montney land. Athabasca said it is establishing a core area at Placid where it has high-graded 25,000 acres in the Montney in two separate intervals. December gross production in this area averaged 900 boe/d, of which 44% was liquids.
Murphy will pay $250 million (Can.) at closing, which is expected late in the first quarter. An additional $225 million (Can.) is in the form of capital carry in the Duvernay with Murphy funding 75% of Athabasca’s share of development capital for up to 5 years.
Athabasca will retain operatorship of the regional midstream infrastructure in the near term.
Separately, Athabasca said Tom Buchanan, Athabasca chairman, will step down upon closing of the Murphy transaction, and Ron Eckhardt, current lead director, will become chairman.