Crew Energy disposes of Princess to focus on Montney
Crew Energy of Calgary, Alberta entered into a purchase and sale agreement to dispose of its Princess, Alberta asset for total cash consideration of $150 million allowing the company to sharpen its focus on the development of its core Montney assets in Northeast British Columbia.
The Princess Disposition is scheduled to close on or about September 30, 2014 with an effective date of August 1, 2014. The proceeds from the Princess Disposition will be used to expand Crew’s 2014 Montney capital program by $20 million, and repay bank debt.
With a Montney land base of over 300,000 acres and an estimated drilling inventory in excess of 2,100 locations, Crew is well positioned to replace the production and reserves from the Princess Disposition with continued development of the Montney. To replace production, the approximately $150 million in proceeds from this disposition could fully fund the construction and commissioning of a new 60 mmcf per day gas plant and the drilling of approximately 20 Montney liquids-rich gas wells to fill the new facility. The most recent subset of wells have had 30 day production rates of six to eight mmcf per day, with associated liquids of 30 bbls per mmcf (60% condensate).
Crew currently holds existing capacity, or is in advanced commercial agreement negotiations on all of the three major pipeline systems in the region. This allows Crew to benefit from both market and operational diversification and also positions the Company to serve the many proposed West Coast LNG pipeline projects.
With its long term drilling potential coupled with significant take-away capacity, Crew is exceptionally well positioned to deliver its growing product stream into various markets, such as the Pacific Northwest, the TCPL AECO market, the upper mid-west Market in the Chicago area, as well as being positioned to meet potential LNG demand along the West Coast of Canada and the United States.
Press Release, August 28, 2014; Image: Crew Energy