Operating through its subsidiary TriOil Resources Ltd. (“TriOil”), PKN ORLEN has completed its acquisition of Canadian-based oil and gas producer, Birchill Exploration LP at total price of CAD 255.6 million, which is around PLN 707.2 million. Thanks to this acquisition ORLEN Group will increase its annual production potential to almost 2.6 million barrels of oil equivalent (boe) and its 2P reserves to over 48 million boe.
The transaction is a major step towards further growth of PKN ORLEN's business – the new additions to the Company's portfolio of producing assets will increase its inventory of drilling locations, ultimately leading to higher production and larger reserve base. The acquisition of Birchill, for a total price of CAD 255,6 m (or approximately PLN 707,2 m), will strengthen PKN ORLEN's position in the Canadian upstream market.
“The acquisition of Birchill gives us access to significant new resources, expands our know-how in the field of technology used in exploration and, consequently, increases the value of the ORLEN Group. We will try to benefit out of gained experience in Canada during works aimed at exploration of unconventional hydrocarbons in Poland, which is one of our priorities” - said Jacek Krawiec, President of the PKN ORLEN Management Board.
Over the last four years, Birchill discovered and appraised crude oil and natural gas reserves of approximately 26,6 million boe in the Ferrier/Strachan areas of Alberta. In Q1 2014, the average production from those assets was approximately 3,400 barrels of oil equivalent per day (40% liquids).
ORLEN Group’s existing Canadian assets, which are managed by TriOil and located in the Lochend, Kaybob and Pouce Coupe areas of Alberta, and have 2P reserves of approximately 22 million boe, with average production in Q1 2014 of approximately 3,700 boe/d. TriOil currently develops the Dunvegan formation in the Kaybob area, and has reported increased production of condensate from gas-rich wells in the Montney formations, and oil from the Cardium formation in the Lochend area. The Birchill assets are located in the proximity of TriOil’s Cardium production at Lochend. The knowledge gained through the development of the Lochend asset will enable TriOil to increase the production and reserves at Ferrier/Strachan from the Cardium, as well as from other numerous formations.