In what is rumoured to be a “helluva deal” for Canadian Natural Resources Limited (CNRL) (TSX:CNQ), the company announced it had acquired 70 per cent of the Athabasca Oil Sands Project (AOSP), 70 per cent of the Scotford upgrader, and other oil sands properties from Shell Canada Limited. Insiders believe Shell was out-negotiated, out-maneuvered, and out-foxed by the wily CNRL who will sign a cheque for $12.74 billion on the purchase date.
This deal will boost CNRL’s production levels by approximately 196,000 barrels/day (bbl/d) with February production at about 188,000 bbl/d of mine production and upgrader output of 195,000 barrels-of-oil-equivalent (boe) from AOSP and 13,800 bbl/d of heavy oil from its newly acquired Peace River properties.
CNRL’s executives were justifiably gleeful. Corey Bieber, CNRL’s CFO says, “It is a rare opportunity to be able to acquire a world class oil sands mining and upgrading asset like AOSP. Unlike a greenfield development, there is no implementation and construction risk or delays. This transaction is immediately cash flow and earnings accretive to CNRL’s shareholders. The way the deal has been structured also facilitates immediate improvement to most of the company’s key credit indicators.”
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