Asset A&D

ConocoPhillips Acquires Montney Assets from Kelt Exploration

By Shivangi Jain
July 23, 2020
2 minutes read
Oil Pumpjacks

ConocoPhillips has signed a definitive agreement with TSX-listed Kelt Exploration Ltd. to acquire certain Montney assets located in north-east British Columbia. The properties are currently held by Kelt Exploration (LNG) Ltd., a wholly-owned subsidiary of Kelt Exploration.

The total consideration includes US$375 million to be paid in cash (before customary closing adjustments) plus the assumption of approximately US$30 million in financing obligations for associated partially-owned infrastructure related to the acquired acreage.

ConocoPhillips will acquire 140,000 net acres in the liquids-rich Inga-Fireweed asset, located adjacent to its existing Montney lands, containing 1,000 high-quality well locations. The acquisition will add resources of over 1.0 billion barrels of oil equivalent (Bboe), and increases ConocoPhillips’ Montney position to 295,000 net acres with a 100% working interest. Production associated with the acquired assets was approximately 15,000 barrels of oil equivalent per day (boe/d) during March 2020.

The transaction marks ConocoPhillips first significant acquisition since June last year, when it entered into an agreement with privately held Caelus Energy LLC to acquire a 100% interest in the Nuna discovery in Alaska for approximately US$100 million.

“We have tracked and analyzed this adjacent acreage position for a long time. It represents a high-value extension of our existing Montney position, and we’re pleased to capture this opportunity at an attractive cost of supply that meets our criteria for resource additions. The transaction provides operating scale and flexibility to create significant value for shareholders by applying our drilling and completion techniques on this asset and optimizing our future overall Montney development plans. We view the Montney as a very attractive long-term asset,” said ConocoPhillips’ Executive Vice President & COO, Matt Fox.

Kelt Exploration is a Calgary-based independent focused on the development and production of crude oil and natural gas resources in west-central Alberta and north-east British Columbia. The company remains one of the largest players in the Montney play with a land position covering approximately 375,000 net acres, and additional assets in the Charlie Lake play in Alberta.

The completion of the transaction remains subject to customary closing conditions, including approval by the regulatory authorities, and is expected to be completed in Q3-2020, with an effective date of July 1st.

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