Canada’s CNRL seeks to buy Alberta gas assets from Tourmaline

Canadian Natural Resources Ltd (CNRL) is seeking to acquire a portfolio of natural gas properties in Alberta from Tourmaline Oil. According to a notice published by Canada’s Competition Bureau, CNRL filed a request related to the transaction on December 30.

While further details have not been disclosed on the Competition Bureau’s website or by either company. However, the Globe and Mail reported this week that the transaction involves gas assets in Alberta worth over CAD1bn ($719mn). Citing two sources familiar with the matter, the newspaper said that CNRL was in talks to acquire a natural gas business in Alberta’s Peace River region that Tourmaline had put up for sale in November.

According to the Globe and Mail’s sources, CNRL is seeking preliminary regulatory feedback on a potential acquisition of the Tourmaline assets prior to announcing such a purchase.

The newspaper added that last year, the portfolio had been estimated by analysts to have the potential to fetch up to CAD1.4bn ($1.0bn) in a sale. Separately, the Financial Post cited a TD Securities analyst, Aaron Bilkoski, as estimating the assets as being worth at least CAD800mn ($575mn).

The Globe and Mail noted that Tourmaline’s Peace River operations include 2,428 horizontal wells, 34 gas plants and 15,500 km (9,631 miles) of pipelines. It said that CNRL also owns gas wells and related infrastructure in the area.

Tourmaline has said it would not comment on the sale process of its Peace River assets before its fourth-quarter earnings report, which is scheduled for release on March 4. The potential sale comes as Tourmaline expands its operations in British Columbia’s Montney gas play.

CNRL, meanwhile, is Canada’s second-largest gas producer as well as being a leading oil sands producer. According to the company’s latest investor presentation, it uses 32% of its gas output for its own needs – within its oil sands refineries. The company has also voiced an intention to grow its gas business, citing a combination of improvements in drilling technology and its Alberta network of pipelines and other energy infrastructure.