Repsol divests Canadian upstream unit to local player

Canada

CALGARY, September 7, 2023 – Spanish energy giant Repsol has signed an agreement to sell its Canadian upstream business to Peyto Exploration & Development Corporation for USD 468 million, the local E&P player announced on Wednesday.

The local company will purchase Repsol Canada Energy Partnership, which holds Repsol’s Canadian upstream arm, Repsol Exploración.

The sale encompasses all mineral rights and related facilities and infrastructure, including the Edson Heritage, Bigstone and Wild River plays in the Greater Edson area that have a production capacity of 23,000 boepd, most of which is gas.

It also includes five operated gas processing plants with a combined gas processing capacity of around 11.3 mcm (400 mcf) per day, a 12 GW cogeneration power plant and 2,200 kilometres of pipeline infrastructure, including the Central Foothills gas gathering system.

The divestment is expected to take place in October 2023 and is subject to closing conditions and regulatory approvals.

“The Repsol assets fit perfectly with Peyto’s existing Deep Basin acreage and offer a significant number of top-tier undeveloped locations that will immediately compete for capital within our portfolio,” said Jean-Paul Lachance, president and CEO of Peyto Exploration & Development Corporation.

“Furthermore, we have identified many opportunities to leverage our low-cost, operational expertise on these assets which we expect will yield significant annual cost savings.”

The purchase will see the company become the prominent operator on the Deep Basin in the province of Alberta with 4,856 square kilometres of highly delineated lands.

Peyto has developed a three-year plan following the acquisition that involves spending between USD 450 million and USD 500 million per year to raise production levels of 123,000 boepd to more than 160,000 boepd by the end of 2026.