Canadian Shale Horn River Play Attracts Further Japanese Interest in Penn West JV
Japan’s presence in the Canadian shale sector increased this week with Tokyo Gas, Osaka Gas, Chubu Electric and JOGMEC all joining Mitsubishi in their Horn River shale joint venture with Penn West Energy.
The move coincided with a report from the BC Ministry of Energy and Mines that put an estimate of potential resources in the play at 61–97 TCF of gas with a mid-case estimate of 78 TCF. The new entrants will join existing Asian Pacific companies PetroChina, Mitsubishi and Korea Gas Corp in the sector. These companies all hold shale gas assets in British Columbia which are ideally positioned to either export production via the currently under production Kitimat LNG terminal on the west coast, or to use the production as a hedge against fluctuating gas prices.
The largest Eamp;P deal of the week saw Westfire Energy Ltd acquire Orion Oil amp; Gas for C$364 million.
The acquisition was a friendly takeover that offered virtually no premium on the 1-day prior trading price of Orion Oil amp; Gas. The resulting entity will look to benefit from the combination of Orion’s highly developed cash generating assets with Westfire’s large inventory of undeveloped land in the promising Viking light oil play in Alberta...