Mideast Firm Looks Abroad for Energy
Abu Dhabi National Energy Co., a state-owned company based in the United Arab Emirates, agreed yesterday to buy PrimeWest Energy Trust of Calgary, Alberta, for 2.4 billion Canadian dollars (US$2.4 billion) plus assumption of debt. PrimeWest holders will get C$26.75 for each trust unit they hold, a 34% premium to Friday's closing price on the New York Stock Exchange.PrimeWest surged $6.32, or 32%, to $26.25 as of 4 p.m. yesterday in NYSE composite trading.
The deal by the Middle Eastern company, known as TAQA, is its third in Canada and triples its investment in the Canadian energy sector to $7.5 billion. TAQA has a $20 billion investment goal in Canada by 2012.
TAQA's investment strategy, which counters the decades-long trend of Western capital flowing to the oil-rich Middle East, acknowledges the difficulty in finding stable sources of oil and natural gas and bringing supplies to market. Canada offers political stability and proximity to the U.S., plus vast oil and gas reserves.
TAQA plans to spend as much as $60 billion world-wide by 2012, split evenly among Canada, Europe, and the Middle East and Africa, with yesterday's deal bringing the current tally up to $21 billion, TAQA Chief Executive Peter Barker-Homek said. But tight rules governing Middle Eastern involvement in the U.S. energy sector have frustrated TAQA's wishes to enter that market, he said.
TAQA's investments mark a new wrinkle in the surge of Middle Eastern capital seeking out investments in the West. And Canada's market has its own challenges. Asset prices have surged as companies have hunted for deals. Also, the rising cost of everything from drills and pipe to skilled oil-field know-how has challenged major projects.
Grant Hofer, a Calgary-based analyst at UBS Securities, said in a research note that TAQA's offer for PrimeWest assumes a long-term natural-gas price some $3 per British Thermal Unit higher than current futures prices.
Last month, TAQA closed its $2 billion purchase of Northrock Resources, the Calgary-based exploration arm of Houston's Pogo Producing Co., and has said it will buy Pioneer Canada for $540 million.
TAQA North also plans acquisitions in the oil and gas pipeline sector, as well as power generation and distribution, Mr. Barker-Homek said.
In the first six months of the year, PrimeWest reported net income of C$117.9 million on revenue of C$299.1 million.
PrimeWest manages oil and gas-producing assets and pays monthly cash distributions to unit holders. Last year it had average daily production of about 39,000 barrels of oil equivalent and had proved and probable reserves of 192.5 million barrels of oil equivalent. Source
The deal by the Middle Eastern company, known as TAQA, is its third in Canada and triples its investment in the Canadian energy sector to $7.5 billion. TAQA has a $20 billion investment goal in Canada by 2012.
TAQA's investment strategy, which counters the decades-long trend of Western capital flowing to the oil-rich Middle East, acknowledges the difficulty in finding stable sources of oil and natural gas and bringing supplies to market. Canada offers political stability and proximity to the U.S., plus vast oil and gas reserves.
TAQA plans to spend as much as $60 billion world-wide by 2012, split evenly among Canada, Europe, and the Middle East and Africa, with yesterday's deal bringing the current tally up to $21 billion, TAQA Chief Executive Peter Barker-Homek said. But tight rules governing Middle Eastern involvement in the U.S. energy sector have frustrated TAQA's wishes to enter that market, he said.
TAQA's investments mark a new wrinkle in the surge of Middle Eastern capital seeking out investments in the West. And Canada's market has its own challenges. Asset prices have surged as companies have hunted for deals. Also, the rising cost of everything from drills and pipe to skilled oil-field know-how has challenged major projects.
Grant Hofer, a Calgary-based analyst at UBS Securities, said in a research note that TAQA's offer for PrimeWest assumes a long-term natural-gas price some $3 per British Thermal Unit higher than current futures prices.
Last month, TAQA closed its $2 billion purchase of Northrock Resources, the Calgary-based exploration arm of Houston's Pogo Producing Co., and has said it will buy Pioneer Canada for $540 million.
TAQA North also plans acquisitions in the oil and gas pipeline sector, as well as power generation and distribution, Mr. Barker-Homek said.
In the first six months of the year, PrimeWest reported net income of C$117.9 million on revenue of C$299.1 million.
PrimeWest manages oil and gas-producing assets and pays monthly cash distributions to unit holders. Last year it had average daily production of about 39,000 barrels of oil equivalent and had proved and probable reserves of 192.5 million barrels of oil equivalent. Source
No comments:
Post a Comment