Strathcona Resources Ltd. Announces Increase in Credit Facility to C$1.5 Billion and Completion of Merger with Caltex Resources Ltd. and Stickney Resources Ltd.

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CALGARY, Alta., March 14, 2022 /PRNewswire/ – Strathcona Resources Ltd. (“Strathcona“or the”Company“) is pleased to announce that it has completed its merger with Caltex Resources Ltd. (“Caltex“) and Stickney Resources Ltd. (“Stickney“).

At November 30, 2021, Strathcona and affiliates of Waterous Energy Fund (“WEF“) acquired Caltex, a private oil company with high-margin enhanced oil recovery (“EOR“) active near Strathcona Lloydminster heavy oil EOR operations. At the time of the acquisition, Caltex was producing approximately 13,000 boe/d (98% oil).

At January 31, 2022, Strathcona and WEF acquired the Tucker Asset through an acquisition entity named Stickney Resources Ltd. The Tucker Asset is a high margin thermal steam assisted gravity drainage asset located in the cold lake region of albertanext to Strathcona Orion and Lindbergh thermal properties. At the time of the acquisition, Tucker was producing approximately 19,000 bpd of oil.

At March 11, 2022, Strathcona increased its covenant-based credit facility by 67% to 1.5 billion Canadian dollarsand Caltex and Stickney were merged into Strathcona. Strathcona credit facility has a maturity date February 27, 2026with an expected print run of $870 million from March 31, 2022. Strathcona the capital structure also includes 500 million US dollars 6.875% senior unsecured notes due 2026.

Publish this consolidation operation, Strathcona will have significantly increased in size with production of ~110,000 boe/d (85% oil and liquids) and 1.9 billion boe of proved plus probable (2P) reserves (reserve life index of ~48 years), making it one of the largest private oil companies in North America. Strathcona assets are concentrated in three main operational areas:

  • Cold Lake Thermal Oil: ~50,000 boe/d (100% liquid) from the Lindbergh, Orion and Tucker assets, located in the cold lake region of alberta.
  • Montney Gas: ~35,000 boe/d of liquids-rich natural gas (45% liquids) at Kakwa, alberta and Groundbirch, British Columbia.
  • Lloydminster Heavy Oil: ~25,000 boe/d (99% liquids) from EOR-supported long-life heavy oil assets located in Saskatchewan and alberta.

“It’s an exciting day for Strathcona,” says Rob Morgan, President and CEO. “The merger continues our highly disciplined and focused approach to growth. With the addition of Caltex and Stickney, we now rank sixth among Canadian oil and natural gas producers based on proven and probable reserves. We believe our consolidation strategy of combining highly complementary, premium assets into a scalable operating platform provides operational efficiencies, an option for organic growth from an established infrastructure footprint and supports continued progress in reducing our overall emissions intensity..

Advisors
ATB Capital Markets, BMO Capital Markets and CIBC Capital Markets acted as financial advisors to Strathcona on the acquisition of Caltex. RBC Capital Markets and TD Securities acted as financial advisors to Strathcona on the acquisition of Tucker.

On Strathcona

Strathcona is a Calgaryprivate oil-based company focused on the exploration, development and production of oil and gas resources in Western Canada. Strathcona is owned by Waterous Energy Fund and Strathcona employees.

Rob Morgan
President and CEO

Michael Makinson
Senior Vice President and Chief Financial Officer

SOURCE Strathcona Resources Ltd.

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