Crew's heavy-oil deal
Crew Energy is buying privately owned Caltex Energy for C$622 million ($653 million), including C$80 million of assumed debt, to acquire heavy-oil assets in Canada's Saskatchewan and Alberta provices. With a market capitalisation of C$1.49 billion, Crew expects the deal will give deliver proved plus probable reserves of 43 million barrels of oil equivalent (boe) – 48% oil and liquids – and will raise its production by 10,500 boe/d to an average of 23,000-24,000 boe/d this year, risnig to 32,500-34,500 boe/d at the start of next year.
The company expects to increase its 2011 capital budget by 27% to C$330 million. The deal will give Crew exposure to significant heavy-oil properties in the Lloydminster area of Saskatchewan and liquids-rich natural gas assets in the Greater Wapiti area of Alberta. Crew said the properties have a large inventory of low-risk drilling sites and lend themselves to the use of new technologies to enhance oil recovery.