re: Ann: Closing on $20M Duvernay Acreage Tra...
"In October, for instance, Anderson Energy Ltd. publicly asked for offers on deep rights underlying 3,136 hectares (2,530 net) located in west central Alberta. Companies of this class would use cash raised through selling deep rights to develop less challenging prospects like Cardium tight oil.
B&G Energy Ltd. came up with an exceptionally clever strategy for monetizing their Duvernay properties. I got this story second-hand but the source has always been reliable. B&G, a privately-held junior producer, had a distinctly Chevron flavor, including its president Guy Grierson, formerly a geologist and district supervisor with the multinational.
B&G held an extensive Duvernay position in the Kaybob area. Instead of attempting to drill and complete expensive horizontal wells in a little-understood target, the company compiled information on its Duvernay lands while drilling less expensive wells into other formations at less risk and expense.
The strategy succeeded when Shell Canada apparently paid $180 million for B&G’s assets. Shell got a head start on some promising targets while the junior achieved what its investors wanted, a highly profitable exit strategy. The sale terms were not publicly released."
MKE Price at posting:
13.5¢ Sentiment: Hold Disclosure: Held
