Today, PKN ORLEN, through its upstream segment subsidiary ORLEN Upstream Canada Ltd, has completed the acquisition of all of the outstanding common shares of Kicking Horse Energy Inc. (“Kicking Horse”), a Canadian oil and gas company. The Kicking Horse assets significantly increase the exploration and production portfolio of ORLEN in the Western Canada, adding approximately 4100 boe/d to current production and 30 million barrels of hydrocarbon resources (2P).
The acquisition of the Kicking Horse outstanding shares was completed on 1 December. On November 30, at Kicking Horse’s Annual and Special Meeting of Shareholders, the transaction was approved by the required majority of votes for the acquisition of shares and take-over of the Kicking Horse by ORLEN Upstream. The deal was confirmed on formal grounds by the Court of Queen’s Bench of Alberta. As of 1 December the Kicking Horse shares were delisted at TSX Venture Exchange.
During the due diligence process, the Kicking Horse Energy assets were evaluated by ORLEN as economically attractive even at low prices of hydrocarbons. Kicking Horse had a stabilised financial position, and assets at its disposal guaranteed its further dynamic growth. Given all the aforesaid attributes, we expect an effective integration of teams and assets, and also an immediate increase in our portfolio’s value – said Wiesław Prugar, President of the Management Board, CEO of ORLEN Upstream.
The value of the deal was of approximately CAD 295 million (i.e. ca. PLN 890 million). The deal was closed through an increase in equity of the subsidiary ORLEN Upstream Canada Ltd. and a take-over of Kicking Horse’s credit line. Since the formal phase of the deal is completed, ORLEN Upstream will launch the integration process of operations of the Canadian companies in the segment.
ORLEN Upstream Canada plans to continue the selected development direction for Kicking Horse, with operational activities being focused on the Montney formation in the East Kakwa area (Deep Basin area in the province of Alberta). The remaining exploration and production areas in Western Canada, which were added to ORLEN’s portfolio, include Pinto, Chime, Benzanson and Wapiti. The acquired assets also include mining areas (crude oil) and exploratory areas (shale gas) in Stoney Creek, New Brunswick, and a 10.7% stake in Pieridae Energy, a private company managing the Goldboro LNG project.
Based on December 2015 estimates, the average output of ORLEN Upstream Canada will be around 11 thousand boe/d . The Canadian resources of ORLEN, including Kicking Horse reserves as estimated on December 31, 2014, will rise to approximately 80 million boe 2P.