CALGARY, March 17, 2014 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") announced
today it has entered into an agreement with Whitecap Resources Inc.
("Whitecap") to acquire ownership interests in certain gas processing assets
in west central Alberta, and in the associated oil and gas reserves. Whitecap
is initially acquiring these assets as part of a larger transaction. Total
cost to acquire the assets from Whitecap is approximately $113 million. The
acquisition is subject to typical closing conditions, and is expected to close
on May 1, 2014.
As part of this agreement, Keyera will acquire the following:
-- an 85% ownership interest in the West Pembina 6-28 gas plant
(the "Cynthia gas plant");
-- varying ownership interests in certain oil batteries,
compressors and gathering pipelines associated with the Cynthia
-- a 4.6% ownership interest in the Bigoray gas plant, bringing
Keyera's ownership in that facility to 100%; and
-- Nisku reserves currently tied into the Cynthia and Bigoray gas
"We are very pleased with the acquisition of the Cynthia gas plant and
associated facilities, as well as increasing our ownership in the Bigoray gas
plant to 100%," said David Smith, Keyera's President and Chief Operating
Officer. "The Cynthia gas plant is well positioned to provide deep cut
processing solutions for new gas production from the numerous geological zones
currently under development in the area. We expect to interconnect the plant
with other Keyera facilities in the area, in order to relieve processing
constraints at those facilities and provide an enhanced level of service for
all of our customers."
The Cynthia gas plant has a licensed capacity of 78 million cubic feet per
day, and is located in west central Alberta near Keyera's Pembina North,
Brazeau North and Bigoray gas plants. The plant has a turbo expander capable
of extracting a deep cut of ethane rich NGLs ("C2+ mix") from the raw gas
stream. The plant also has an acid gas injection facility that enables it to
handle sour gas. Current throughput is approximately 46 million cubic feet
per day, and is largely associated gas and NGLs from Nisku oil production in
the area. Upon closing, Keyera expects to become the operator of the facility.
A maintenance turnaround is scheduled at the plant for May 2014, at an
estimated cost of approximately $10 million.
The oil batteries and compressors are integral to the delivery of natural gas
and NGL production to the Cynthia gas plant, as are the gathering pipelines.
Along with the gathering and processing facilities, Keyera is acquiring
reserves from the Nisku geological horizon, with the associated wells
producing into the Cynthia and Bigoray gas plants. Production from these
wells averaged approximately 8,700 barrels of oil equivalent per day in 2013,
of which about one third was crude oil and NGLs and two thirds natural gas.
Because the reserves are in the late stages of their life cycle, Keyera
currently estimates the production decline rate to be between 25% and 30%
annually and has no plans to drill additional wells. Rights of first refusal
exist on portions of the reserves and certain surface assets associated with
Keyera Corp. (TSX:KEY) operates one of the largest natural gas midstream
businesses in Canada. Its business consists of natural gas gathering and
processing as well as the processing, transportation, storage and marketing of
NGLs, the production of iso-octane and crude oil midstream activities.
Keyera's gas processing plants and associated facilities are strategically
located in the west central, foothills and deep basin natural gas production
areas of the Western Canada Sedimentary Basin. Its NGL and crude oil
infrastructure, including pipelines, terminals and processing and storage
facilities, as well as its iso-octane facility, are located in Edmonton and
Fort Saskatchewan, Alberta, a major North American NGL hub. Keyera markets
propane, butane, condensate and iso-octane to customers in Canada and the
This document contains forward-looking statements based on Keyera's current
expectations and assumptions relating to its business, the environment in
which it operates, its future operations and the performance of its assets,
including the newly acquired Cynthia gas plant and associated reserves and
facilities. As these forward-looking statements depend upon future events,
actual outcomes may differ materially depending on factors such as: the
exercise of rights of first refusal; producer interest in the services being
offered; future operating results of the assets; the ability of Keyera to
execute each of their strategic initiatives in connection with the facilities
and reserves to be acquired; changes in production decline rates; weather
conditions; commodity supply/demand balances and prices; activities of
producers, competitors, customers, business partners and others; overall
economic conditions; access to capital and financing alternatives; operational
risks associated with gas plant operation and oil and gas production;
turnaround scheduling and costs; environmental liabilities; and potential
delays or changes in producer development plans in the area; the legislative,
regulatory and tax environment; and other known or unknown factors. There can
be no assurance that the results or developments anticipated by Keyera will be
realized or that it will have the expected consequences for or effects on
Keyera. The closing of this transaction is subject to clearance under
Competition Act (Canada). There is no guarantee that such clearance will be
received in a timely basis or at all.
For additional information on these and other factors, see Keyera's public
filings on www.sedar.com. Unless otherwise required by applicable laws, Keyera
does not intend to publicly update or revise forward-looking statements,
whether as a result of new information, future events or otherwise.
SOURCE Keyera Corp.
For further information about Keyera, please visit our website
atwww.keyera.com or contact:
Keyera Corp. John Cobb, Vice-President, Investor Relations, or Julie Puddell,
Manager, Investor Relations Email:firstname.lastname@example.org; Telephone: 403.205.7670 /
Toll Free: 888.699.4853
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CO: Keyera Corp.
-0- Mar/17/2014 11:35 GMT
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