Source: Direct Energy
Retail electricity provider Direct Energy, a subsidiary of Centrica (LON:CNA), has completed its acquisition of Suncor Energy's (TSX:SU) (NYSE:SU) Wildcat Hills natural gas assets for $367.5 million.
The Wildcat Hills area is located about 35 kilometers northwest of Calgary, Alberta. With 97 producing wells, associated infrastructure and 42,000 acres of undeveloped land, production at Wildcat Hills averages at 80 MMcf/d of gas equivalent, and reserves are estimated at 241 Bcf of gas equivalent.
"Our initial impression of the strength of the Wildcat Hills assets, in terms of the expected natural gas production and dedicated staff, has been affirmed during the process of integrating it into our existing operations," said Badar Khan, President, Direct Energy Upstream & Trading.
With the acquisition, Direct Energy's total natural gas equivalent production increases by approximately 80 percent to approximately 180 mmcfe/day (95 percent gas).
"Direct Energy intends to continue investigating opportunities for upstream investments in natural gas, including shale, and power generation assets in North America. In today's low natural gas price environment, well-capitalized companies, like ours, are in a strong position to acquire value-producing assets which is consistent with our strategy for greater integration and growth," noted Mr. Khan.
The addition of the Wildcat Hills assets brings Direct Energy's upstream asset cover to approximately 35 percent of the load required by its North American retail natural gas customers.