In The NewsHigh Media Interest as Pieridae Closes Shell Asset Acquisition

October 17, 2019

With Shell Deal Completed, Pieridae Secures Bulk of Gas for Goldboro LNG
Natural Gas Intelligence Gordon Jaremko October 17, 2019

Pieridae Energy Ltd. has closed the purchase of all of Shell Canada Energy’s midstream and upstream assets in the southern Alberta foothills for C$190 million ($142.5 million) in a deal that would provide the majority of gas needed to supply the first train at its proposed Goldboro liquefied natural gas (LNG) export facility in Nova Scotia.

The acquisition substantially increases Pieridae’s gas output to 210 MMcf/d by adding 119 MMcf/d of Shell production. The company previously produced just 91 MMcf/d. The package also includes 8,819 b/d of natural gas liquids and light oil.

Pieridae CEO Alfred Sorenson called the deal “transformational,” saying “it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least twenty years.”

Pieridae has predicted that financing for the Goldboro LNG supply development in Alberta would be raised with the help of a $1.5 billion German government loan guarantee that the firm is seeking from a clean fuel incentive program.

The Shell transaction is the latest step in a marathon campaign to start LNG exports from the Atlantic coast of Nova Scotia. When the 1.4 Bcf/d export project was announced in October 2012, Pieridae projected that the export terminal would be in operation by late 2018.

Prospects of eastern gas supplies, thought to be available in 2012, have dried up. Depleted offshore production ended last winter. Fracking bans also have stopped replacement development onshore in Nova Scotia, New Brunswick and Quebec.

Since announcing the Shell deal in June, Pieridae obtained an extension under a European LNG sales contract deadline to make a final investment decision and start building the Nova Scotia terminal.

Pieridae Energy closes Shell Canada Foothills assets acquisition
Published by Will Owen, Assistant Editor LNG Industry, Thursday, 17 October 2019 16:30

Pieridae Energy Ltd. is pleased to announce that it has closed its acquisition of all of Shell Canada Energy’s midstream and upstream assets in the southern Alberta Foothills for C$190 million in accordance with the terms of the amended and restated purchase and sale agreement (PSA) dated 7 October 2019.

Further to the C$10 million deposit paid at signing the PSA, on closing, Pieridae paid to Shell C$165 million of the purchase price of the acquisition in cash (net of adjustments) which Pieridae funded through the issuance of term debt and equity (as further described below). Pieridae satisfied the balance of the purchase price of C$15 million by the issuance to Shell of 15.2 million common shares of the company having an aggregate value of C$15 million determined in accordance with the PSA.

“We are very pleased to close this transformational acquisition as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least 20 years,” said Pieridae’s Chief Executive Officer, Alfred Sorensen. “We will now complete our negotiations with Kellogg Brown & Root Ltd. for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision (FID).”

With the acquisition, Pieridae now has an extensive drilling inventory encompassing multiple dry gas and liquids-rich gas reservoirs within the Foothills area. The company has engaged professionals, many of whom are transitioning from Shell, who have strong experience managing the four major processing facilities and associated midstream assets. Together with existing Foothills drilling and development experience within the company, Pieridae is well positioned to leverage the US$1.5 billion of the government-backed guarantees for conventional gas supply development which the German government approved in principle. This amount is in addition to the US$3 billion of government-backed guarantees for the construction of the Goldboro LNG facility, which the German government has also approved in principle. Certain aspects of the asset retirement obligation, with respect to the Jumping Pound and Waterton gas plants, remain with Shell.

“There are additional opportunities to develop our liquids-rich areas, process the sour gas, strip out the liquids, store the dry gas and then further develop our dry gas resources down the road,” concluded Sorensen.

In addition to the implementation of certain cost savings initiatives, Pieridae anticipates taking full advantage of the gas plant processing capabilities and other associated upstream services developed by Shell.

Moving forward, Pieridae is committed to working with the communities surrounding its newly acquired assets, including continuing to build trust with the Treaty 7 Nations through respectful engagement and collaboration.

Pieridae Energy closes acquisition of Shell's Foothills assets
Published by Nicholas Woodroof, Assistant Editor
Oilfield Technology, Thursday, 17 October 2019 15:00

Pieridae Energy has announced that it has completed its acquisition of Shell Canada's Foothills assets, including the Jumping Pound, Caroline and Waterton gas plants, 29 000 boe/d of production, a partial ownership of the Shantz sulfur plant and 1700 km of pipelines.

The acquisition gives the company the majority of the natural gas needed to supply the first facility (or train) at the Goldboro LNG facility in Nova Scotia, Canada.

The company will now work with KBR to develop a fixed price contract and designs to build Goldboro, then proceed to complete project financing and make a final investment decision.

Shell sells Caroline gas plant
Mountainview Gazette DAN SINGLETON OCT 17, 2019

Shell Canada Energy has finalized the sale of the massive Caroline sour gas plant northwest of Sundre and other assets in western Alberta to Pieridae Energy Limited, officials said Wednesday.

Effective Oct. 17 Ikkuma Resources Corp., a subsidiary of Pieridae Energy Limited, will operate assets including three distinct sour gas plants – Waterton, Jumping Pound and Caroline – and the gas fields which feed them, as well as a portion of the Shantz Sulphur Forming facility just off Highway 22 southeast of Sundre.

The Shantz facility is tied to the Caroline gas facility through an underground pipeline.

Pieridae Energy Limited and Shell announced the $190 million sale in June.

All site-based Shell employees and some Calgary-based Shell employees who predominantly support the assets will be retained, officials said.

“Shell has built a strong foundation of reliable, competitive and safe sour gas operations in Alberta over many decades. I want to thank the many Shell employees and contractors who contributed to the success of these assets,” Shell Canada president and country chair Michael Crothers said in a release.

While Shell will retain a 60 per cent ownership interest in Shantz, Ikkuma will operate the facility on behalf of the Caroline owners. Shell will maintain its sulphur, natural gas liquids and condensate sales and marketing businesses, he said.

Shell has also announced that it has established a $2 million legacy fund, which will provide non-profit organizations with access to funding to continue delivering important services in local communities in the greater Foothills region through 2020 and 2021, he said.

Canadian E. Coast LNG export plans progress with Pieridae's Shell deal
Sabina Zawadzki Reuters - UK Focus18 October 2019

* Pieridae takes ownership of Shell's Alberta gas fields

* The gas will feed first train of Goldboro LNG terminal

* Pieridae has $4.5 bln German government guarantee

* LNG terminal would be the first on Canada's East Coast

LONDON, Oct 18 (Reuters) - Pieridae Energy moved closer to building a liquefied natural gas (LNG) export terminal on Canada's East Coast after taking ownership of fields from Royal Dutch Shell which will feed gas into the plant, the company said.

The Goldboro LNG terminal would be the first on Canada's East Coast and compete with the growing number of plants on the U.S. Gulf Coast, hoping its shorter distance to Europe and further west will help sell its LNG by cutting shipping costs.

Pieridae said in a statement late on Thursday it had closed a C$190 million ($145 million) acquisition of Shell's gas assets in Alberta's Foothills region, giving it most of the gas needed to supply the first of two plants at the Goldboro terminal.

"We will now complete our negotiations with Kellogg Brown & Root Limited for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision (FID)," Pieridae CEO Alfred Sorensen said.

The Canadian LNG industry has been slower than its U.S. counterpart to take advantage of soaring gas demand around the world and build export plants, in part due to securing feedstock supplies for the terminals.

This contrasts to the U.S. Gulf Coast, where there is so much gas being produced thanks to the shale revolution, some producers have had to pay buyers to take it off their hands. This makes it easier for LNG projects there, which tend to buy gas rather than own gas assets.

Five large LNG export terminals operate in the United States including the 25 million tonne a year (mtpa) Sabine Pass, operated by Cheniere Energy. By contrast, there are no operating LNG export facilities in Canada although Shell has begun constructing a massive one on the West Coast.

Unusually for LNG projects in the developed world, Pieridae has a $4.5 billion German government guarantee and has one German buyer, Uniper, for all 5 million tonnes a year produced by its first train, a large contract by industry standards.

Pieridae said the Shell deal allows it to begin to leverage a $1.5 billion of the German government guarantee for the upstream gas production part of its project. The rest of the guarantee applies to the construction of the terminal itself.

Germany, as yet, has no facilities to import LNG but three import terminals have been proposed, including in Wilhelmshaven, a project owned by Uniper Global Commodities.

Europe's gas production is expected to fall in future years with the shutdown of the huge Dutch Groningen gas field and the gradual depletion of reserves in the North Sea.

As part of Germany's involvement in the project, 1.5 million tonnes of LNG sold to Uniper must land in the Netherlands and the subsequent regasified gas shipped to Germany by pipeline, Pieridae's corporate documents showed.

Pieridae Energy closes Shell Canada Foothills assets acquisition
Published by Will Owen, Assistant Editor LNG Industry, Thursday, 17 October 2019 16:30

Pieridae Energy Ltd. is pleased to announce that it has closed its acquisition of all of Shell Canada Energy’s midstream and upstream assets in the southern Alberta Foothills for C$190 million in accordance with the terms of the amended and restated purchase and sale agreement (PSA) dated 7 October 2019.

Further to the C$10 million deposit paid at signing the PSA, on closing, Pieridae paid to Shell C$165 million of the purchase price of the acquisition in cash (net of adjustments) which Pieridae funded through the issuance of term debt and equity (as further described below). Pieridae satisfied the balance of the purchase price of C$15 million by the issuance to Shell of 15.2 million common shares of the company having an aggregate value of C$15 million determined in accordance with the PSA.

“We are very pleased to close this transformational acquisition as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least 20 years,” said Pieridae’s Chief Executive Officer, Alfred Sorensen. “We will now complete our negotiations with Kellogg Brown & Root Ltd. for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision (FID).”

With the acquisition, Pieridae now has an extensive drilling inventory encompassing multiple dry gas and liquids-rich gas reservoirs within the Foothills area. The company has engaged professionals, many of whom are transitioning from Shell, who have strong experience managing the four major processing facilities and associated midstream assets. Together with existing Foothills drilling and development experience within the company, Pieridae is well positioned to leverage the US$1.5 billion of the government-backed guarantees for conventional gas supply development which the German government approved in principle. This amount is in addition to the US$3 billion of government-backed guarantees for the construction of the Goldboro LNG facility, which the German government has also approved in principle. Certain aspects of the asset retirement obligation, with respect to the Jumping Pound and Waterton gas plants, remain with Shell.

“There are additional opportunities to develop our liquids-rich areas, process the sour gas, strip out the liquids, store the dry gas and then further develop our dry gas resources down the road,” concluded Sorensen.

In addition to the implementation of certain cost savings initiatives, Pieridae anticipates taking full advantage of the gas plant processing capabilities and other associated upstream services developed by Shell.

Moving forward, Pieridae is committed to working with the communities surrounding its newly acquired assets, including continuing to build trust with the Treaty 7 Nations through respectful engagement and collaboration.

Pieridae acquires Shell Canada’s Alberta production assets for $144m
Hydrocarbons Technology October 18, 2019

Canadian oil and gas exploration firm Pieridae Energy has acquired Shell Canada’s midstream and upstream assets in the Alberta Foothills area for C$190m (approximately $144m).

The deal comprises three of the Shell’s Alberta assets in Jumping Pound, Caroline and Waterton.

These assets produce 29,000boe/d. Pieridae also now owns a 14% working interest in the Shantz sulphur forming plant that is tied to the Caroline gas facility, as well as 1,700km of pipelines.

The company’s subsidiary Ikkuma Resources will operate the acquired Foothills assets.

The acquisition will enable Pieridae to have a rich drilling inventory of multiple dry gas and liquids-rich gas reservoirs in the Foothills.

Furthermore, the company will be able to raise an anticipated $1.5bn of German Government-supported guarantees, which would be used towards conventional gas supply development.

Through the addition of Alberta assets, Pieridae will create a roadmap to build the $10bn Goldboro LNG Project in Canada.

Pieridae Energy CEO Alfred Sorensen said: “We are very pleased to close this deal as it helps us secure the majority of the gas needed to supply the first train at Goldboro.

“We will complete our work with KBR to develop a fixed price contract to build Goldboro, then finalise project financing and make a final investment decision.”

As part of the acquisition, Shell will retain a 60% ownership interest in Shantz plant, and maintain its sulphur, natural gas liquids and condensate sales, and marketing businesses.

Shell Canada president and country chair Michael Crothers said: “Shell has built a strong foundation of reliable, competitive and safe sour gas operations in Alberta over many decades.”

In June, Pieridae initially signed the agreement related to this acquisition with Shell.

PIERIDAE CLOSES ALBERTA GAS DEAL
AllNovaScotia.com Geoff Bird October 17, 2019

Pieridae Energy Inc. has closed its $190-million acquisition of Shell Canada's natural gas properties in Alberta, giving it most of the feedstock it needs for its Goldboro LNG project.~

Pieridae said Thursday with its purchase of Shell's midstream and upstream assets in the Alberta foothills finalized, it can focus on completing financing for its $8-billion export project in Guysborough County.

"We are very pleased to close this transformational acquisition as it secured the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least 20 years," Pieridae CEO Ralph Sorensen said in a statement.

Pieridae paid Shell $175 million in cash and issued the Dutch supermajor $15 million worth of its shares.

Pieridae is fulfilling the cash component of the deal primarily with a $206-million term loan arranged by Third Eye Capital Corp., a Bay Street lender acting as an agent for several unnamed lenders, the company said.

The loan bears interest at a fixed rate of 12% a year that's payable quarterly. The loan matures in 2023.

An affiliate of Third Eye was the most significant investor that signed up for subscription receipts for the equity portion of Pieridae's debt financing last month. It bought $20 million worth of receipts (see 2019-09-09).

Third Eye, which has issued over $2 billion in loans since 2005, including a handful in the energy sector, bought the Pieridae receipts alongside Electron Capital Partners LLC, a New York hedge fund.

Pieridae is getting from Shell production of 28,600 barrels of oil equivalent a day, as well as proved and probable reserves of 119.96 million barrels of oil equivalent.

The deal includes three gas plants, as well as Shell's staff and office space in downtown Calgary.

It more than doubles Pieridae's current reserves and production, on top of assets it picked up last year in its $94-million all-stock merger with Alberta gas producer Ikkuma Resources Inc.

Pieridae plans to ship gas through TC Energy Corp.'s Mainline pipeline to its proposed plant at the end of the Maritimes and Northeast Pipeline at Goldboro.

A transportation deal with the pipeline owners is another issue to be hashed out.

German energy giant Uniper SE has a contract for the first train's entire production of 750 million cubic feet a day over 20 years.

In October, Germany agreed to increase Pieridae's loan guarantee by US$1.5 billion to help the company acquire natural gas. The loan guarantees are part of a longstanding German program that helps the government secure raw materials and resources.

Pieridae has had a similar guarantee in place since 2013 for debt financing of up to US$3.1 billion to build Goldboro's first train, and another $1 billion for gas resource acquisitions.

Pieridae moves closer to first LNG export terminal on Canada's east coast
Oct. 18, 2019 12:49 PM ET Seeking Alpha Carl Surran

Pieridae Energy (OTC:PTOAF) says it closed a C$190M acquisition ($145M) of Royal Dutch Shell's (RDS.A, RDS.B) gas assets in Alberta's Foothills region, giving it ownership of most of the gas needed to supply the first of two plants at its planned Goldboro LNG terminal.

The deal moves Pieridae closer to building the first liquefied natural gas export terminal on Canada's east coast, which hopes its shorter distance to Europe than plants on the U.S. Gulf Coast will help sell its liquefied natural gas by cutting shipping costs.

Unusual for LNG projects in the developed world, Pieridae has a $4.5B German government guarantee and has one German buyer, Uniper, for all 5M mt/produced by its first train.

Pieridae Energy closes acquisition of Shell’s Alberta assets
LNG World News October 18, 2019

Canadian LNG project developer Pieridae Energy has closed its acquisition of all of Shell’s midstream and upstream assets in the southern Alberta Foothills for CAN $190 million ($144.6M).

The acquisition is in accordance with the terms of the amended and restated purchase and sale agreement from October 7, 2019. The initial sale agreement was signed in late June.

Further to the $10 million deposit paid at signing the agreement, Pieridae paid CAN $165 million on closing to Shell.

Pieridae satisfied the balance of the purchase price of CAN $15 million by the issuance of 15.2 million common shares to Shell.

Pieridae’s CEO Alfred Sorensen said: “We are very pleased to close this transformational acquisition as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least twenty years.

“We will now complete our negotiations with KBR for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision.”

In the first six months of 2019, the bought assets produced approximately 28,634 boe/d consisting of approximately 119 mmcf/d of natural gas, 5,656 bbl/d of natural gas liquids and 3,163 bbl/d of condensate and light oil.

Pieridae also acquired three deep cut, sour gas processing plants – Jumping Pound, Caroline, and Waterton – with a combined capacity of approximately 750 mmcf/d, a 14 percent working interest in the Shantz sulfur forming plant, and approximately 1,700 kilometers of pipelines.

Explaining its rationale for the acquisition, Pieridae said that the assets align well with its existing Central Alberta properties, providing further consolidation of the productive Alberta and British Columbia conventional Foothills natural gas pools.

Pieridae acquires Shell gas for Goldboro LNG plant
October 21, 2019 Kallanish Energy

Pieridae Energy has closed on its acquisition of all of Shell Canada Energy’s midstream and upstream assets in the southern Alberta Foothills for C$190 million ($144.73 million) in cash and stock, Kallanish Energy reports.

The deal will provide natural gas needed for Pieridae’s planned $10 billion Goldboro liquefied natural gas (LNG) export facility in eastern Canada.

“We are very pleased to close this transformational acquisition, as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least 20 years,” said Pieridae CEO Alfred Sorensen, in a statement.

He said his company will now complete negotiations with Kellogg Brown & Root Ltd. for a fixed-price contract to construct the LNG facility in Nova Scotia, northeast of Halifax. The Alberta Foothills natural gas would be shipped east via pipelines.

The Calgary-based company must complete project financing and final equity raise and make a final investment decision, he said. The deal had been announced last June.

The Alberta assets produced about 28,634 barrels of oil-equivalent per day (Boe/d) in the first six months of 2019, the company said.

That consisted of roughly 119 million cubic feet per day (Mmcf/d) of natural gas, 5,656 barrels of natural gas liquids per day, and 3,163 barrels of condensate and light oil.

Pieridae also acquired three deep-cut sour gas processing plants: Jumping Pound, Caroline and Waterton, with a combined capacity of 750 Mmcf/d. The deal also includes a 14% working interest in the Shantz sulfur plant and roughly 1,020 miles of pipelines.

The new assets will fit in with existing Pieridae assets in Alberta and British Columbia, the company said.

It reported it's executed a $206 million credit facility with Third Eye Capital Corp. in conjunction with the Shell purchase. Pieridae has agreements with German utility Uniper to purchase 50% of the LNG, starting in late 2024 or early 2025.

The liquefaction/export facility at Goldboro is designed to produce 10 million tons per year of LNG. It would process roughly 1.3 billion cubic feet of natural gas per day.

The company has government-backed guarantees of $4.5 billion from Germany for conventional gas supply development and LNG construction in Nova Scotia.

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