Canadian Natural Resources buys Devon Canada assets for $3.7 billion

New acquisitions ‘provide further balance to our production profile’

Calgary-based Canadian Natural Resources Ltd. is buying substantially all of the assets of Devon Canada Corp. for a cash purchase price of $3.775 billion.

The company announced on Wednesday the targeted closing date of the deal is June 27.

“Devon’s high quality land and production are located in Western Canada and are within Canadian Natural’s core areas. The asset base consists of 100 per cent operated long life low decline thermal in situ production as well as 95 per cent operated conventional primary heavy crude oil production, both adjacent to existing Canadian Natural assets,” said CNRL in a news release.

Devon EnergyThe assets acquired include 1.5 million acres of land, of which one million acres are undeveloped, providing significant upside value and opportunities, it said.

“These high quality assets complement our existing asset base and provide further balance to our production profile, while not increasing the need for incremental market access out of Western Canada, as it is already existing production,” said Canadian Natural’s president Tim McKay.

“The assets provide us the opportunity to add value through synergies, including facility consolidation and operating and marketing efficiency opportunities, with targeted benefits of C$135 million on an annualized basis. Through economies of scale, as well as complementary research and development efforts, we target to leverage technology advancements across the combined portfolio to drive continuous improvement, cost reductions and production optimization.”

“This acquisition is a great fit for Canadian Natural resulting in a win for both parties and provides further balance to our diverse portfolio. Canadian Natural will now have thermal in situ productive capacity of approximately 320,000 bbl/d, with targeted 2019 exit production of approximately 250,000 bbl/d. This productive capacity provides Canadian Natural with significant opportunities to grow production volumes at very attractive economics, through leveraging the significant existing infrastructure at each of Jackfish, Kirby South, Kirby North and Primrose,” said Canadian Natural’s executive vice-chairman Steve Laut.

“At exit 2019, our targeted production balance will improve to 250,000 bbl/d of thermal in situ production, 450,000 bbl/d of oil sands mining and upgrading production, 150,000 bbl/d of conventional light crude oil and NGLs production, 120,000 bbl/d of heavy crude oil production and 220,000 BOE/d of natural gas production. The ongoing opportunity to leverage technology, innovation and drive synergies is further enhanced through the economies of scale gained. We welcome to Canadian Natural approximately 735 new employees from Devon, comprised of both field and head office personnel, and look forward to capturing their ideas and energy, and creating successes as we have done in the past with Devon employees who have joined us.”

– Mario Toneguzzi

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