Baytex Energy has successfully closed the acquisition of heavy oil assets located in the Peace River area of northern Alberta, Canada.
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For this acquisition, Baytex paid $65m (after adjustments), which was funded by drawing on its revolving credit facilities.
The assets are located immediately adjacent to Baytex Energy’s existing Peace River lands.
With this acquisition, it has added 3,000boe/d of production and doubled its land base in the area.
The company intends to improve oil production from the acquired areas significantly in the next two years.
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By GlobalDataBaytex commenced its operations in the Peace River region in 2004 and since then it has been a core asset.
The company plans to employ multi-lateral horizontal drilling and production techniques in the area.
Under the latest acquisition, the company has acquired 415 net sections of long-tenure oil sands leases. Prior to this transaction, it owned 338 net sections of oil sands leases in the Peace River area.
The acquired assets are currently producing around 3,000boe/d, 85% of which are in heavy oil. The acquisition will increase the company’s daily production at Peace River by 20%.
The total drilling inventory at the site also increases by 75% to more than 350 net wells.
Most of the production will be processed through an infrastructure network that comprises an integrated crude oil pipeline system, centralised oil processing facilities with a blended crude oil sales pipeline.
The assets also include a vast gas gathering and conservation system.
Image: Map of the acquired assets around Peace River. Photo: courtesy of Baytex Energy.
