THE PATCH
Abu Dhabi National Energy - TAQA
Abu Dhabi, U.A.E.
TAQA Europa B.V.
TAQA North
TAQA Energy B.V.
TAQA Bratani
TAQA North is the newest branch
on the Abu Dhabi National Energy
Company’s family tree.
But it was the PrimeWest acquisition—just a month after the
Pioneer deal—that really made a mark on the psyche of the western
Canadian patch: at the time the purchase was announced last
September, Prime West had just finished absorbing Shiningbank
Energy Income Fund, creating one of Canada’s largest oil and gas
trusts, with estimated production of some 66,000 barrels of oil
equivalent per day, weighted 70 per cent to natural gas.
With PrimeWest now in its portfolio, TAQA North boasts
proved plus probable reserves of more than 480 million barrels of
oil equivalent and production of better than 105,000 barrels of oil
equivalent per day. That puts it 10th on the list of companies with
net proven gas reserves and among the top 12 in terms of oil and
gas production.
“Prime West is undoubtedly a great addition to TAQA North’s
existing operations in Canada, providing further scale to help us
capitalize on new and diverse development opportunities,” TAQA
chief executive officer Peter Barker-Homek said in a statement.
“I feel confident we have the right team in place to implement
TAQA North’s development programs and pursue growth opportunities, as we target reserve replacement ratios in the region of
140 per cent.”
For Don Garner, who as president of Prime West had to figure
out a way forward in the face of Ottawa’s trust-killing taxation
measures of October 2006, the fresh infusion of TAQA capital
couldn’t have come at a better time.
“Here we were after Shiningbank with about $1.5 billion worth
of development opportunities and the realization that, if we were
lucky, we might be able to raise the capital to fund maybe a $200-
million program in 2008,” Garner said in a phone interview with
Oilweek on the day TAQA North closed the deal and announced he
would assume the role of the company’s chief executive officer.
“Capital markets [for trusts] aren’t happy places right now.”
But Garner—along with Tim Granger, who becomes TAQA
North’s chief operating officer after an eight-year stint as the man
responsible for Prime West’s development and production operations—is now in a happier place, with enough capital available to
fund an ambitious 2008 program that will see TAQA North spend
about $500 million in pursuit of conventional oil and gas and unconventional gas opportunities across the breadth of the Western
Canadian Sedimentary Basin, from northeastern British Columbia
through Alberta and Saskatchewan, and into the northern reaches
of the Williston Basin, south of the 49th.
With that kind of diversity—both geologic and geographic—
TAQA North isn’t too worried about either Alberta’s new royalty
structure or relatively weak natural gas prices. Opportunities that
are available in B.C. and Saskatchewan shelter it some from the
Alberta royalty uncertainties, Garner says, while commodity gas
prices—according to Barker-Homek—may be off some from
peaks established a few years ago, but they’re still high enough to
support just about any program TAQA North wants to pursue this
year and in the near future.
“The key thing to remember about natural gas prices in North
America now is the impact access to LNG [liquefied natural gas]
has had on the market,” Barker-Homek told Oilweek in the same
conference call. “There is now a floor to natural gas prices that
wasn’t there before LNG started to grow in North America, but,
from the consumer perspective, LNG also serves to cut the peaks
off gas prices.”
As long as service costs stay reasonable—and they are
becoming more and more so each day as the western Canadian
service and supply sector adapts to the new, reduced activity
environment—TAQA North shouldn’t have any trouble meeting
its growth objectives, he added.
