CALGARY, July 7, 2016 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") announced today that it has agreed with Bellatrix Exploration Ltd. ("Bellatrix") to acquire an additional 35% ownership interest in the O'Chiese Nees-Ohpawganu'ck gas plant (the "Alder Flats Plant") and the associated gathering pipelines (collectively the "Facilities"). The total consideration for the acquisition is $112.5 million, which includes the additional working interest in the Facilities, a 10-year take-or-pay commitment, an area dedication agreement and a prepayment of 35% of the estimated future construction costs of Phase 2 of the Alder Flats Plant. The acquisition is subject to typical closing conditions and is expected to close in August.
Upon closing, Keyera will own 70% of the Facilities while Bellatrix will continue to be an owner and the operator of the Facilities. Currently, the Alder Flats Plant, which is located in west central Alberta, has a licenced capacity of 110 million cubic feet per day. Phase 2 is expected to have a design inlet capacity of 120 million cubic feet per day and a target on stream date in the first half of 2018. Bellatrix is responsible for constructing Phase 2 and funding 60% of the costs.
"Keyera is pleased to increase our ownership interest in a fully-utilized gas plant within our core operating area and to continue our partnership with Bellatrix," said David Smith, Keyera's President and Chief Executive Officer. "The acquisition is expected to be immediately accretive to Keyera's distributable cash flow per share, which creates value for our shareholders. With strong geology supporting producer activity in the area, the Alder Flats Plant is expected to remain a core gathering and processing asset for Keyera and a cost-effective, networked processing solution for area producers over the long term."
Keyera Corp. (TSX:KEY) operates one of the largest midstream energy companies in Canada, providing essential services to oil and gas producers in the Western Canada Sedimentary Basin. Its predominantly fee-for-service based business consists of natural gas gathering and processing, natural gas liquids processing, transportation, storage, marketing, iso-octane production and sales, and an industry-leading condensate system in the Edmonton/Fort Saskatchewan area of Alberta. Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner.
This news release contains forward-looking statements based on Keyera's current expectations and assumptions made by the management of Keyera relating to its business, the environment in which it operates, its future operations and the performance of its assets, including the proposed Phase II of the Plant. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: satisfaction of all closing conditions; the potential exercise of the right of first refusal under the construction, ownership and operating agreement; counterparty risk; risks arising from co-ownership of the Facilities; availability and cost of construction crews and materials together with other construction and schedule risks; producer interest in the services being offered; future operating results of the assets; the ability of Keyera to execute its strategic initiatives in connection with the Facilities; regulatory approvals or changes in requirements; changes in production decline rates; weather conditions; commodity supply/demand balances and prices; activities of producers, competitors, customers, business partners and others; overall economic conditions; access to capital and financing alternatives; operational risks associated with gas plant operation and oil and gas production; environmental liabilities; potential delays or changes in producer development plans in the area; the legislative, regulatory and tax environment; and other known or unknown factors. There can be no assurance that the results or developments anticipated by Keyera will be realized or that it will have the expected consequences for or effects on Keyera. The closing of this transaction is subject to clearance under Competition Act (Canada). There is no guarantee that such clearance will be received in a timely basis or at all.
For additional information on these and other factors, see Keyera's public filings on www.sedar.com. The information provided in this release is given as of the date hereof. Readers are cautioned that they should not unduly rely on forward-looking information.
SOURCE Keyera Corp.
For further information: For further information about Keyera, please visit our website at www.keyera.com or contact: Lavonne Zdunich, Director, Investor Relations, or Nick Kuzyk, Manager, Investor Relations, Email: [email protected]; Telephone: 403.205.7670 / Toll Free: 888.699.4853