Korea National Oil buying rest of Hunt Oil Canada assets (G&M)
NATHAN VANDERKLIPPE
Calgary— Globe and Mail Update
Published
Last updated
The Korea National Oil Corp. is buying the remaining assets of Hunt Oil Co. Canada in a $525-million deal.
Sources close to the company say the deal will give KNOC an additional 11,000 barrels of oil equivalent daily production in Canada. About 60 per cent of the production is in natural gas, making it the first material gas transaction the South Korean company has made in North America.
KNOC has been one of the more active foreign acquirers in Canada, beginning with its purchase in 2006 of the BlackGold oil sands project, in a deal that was worth $270-million (U.S.). It took another major step into the Canadian oil patch last fall, with the $1.8-billion acquisition of Harvest Energy Trust.
KNOC will integrate the Hunt Oil assets into those it secured through the Harvest deal. The assets will belong to Harvest Operations Corp., a wholly owned subsidiary of KNOC. The South Korean parent has agreed to “inject $525-million of additional capital into Harvest in exchange for equity to fund the acquisition at closing,” according to a statement from Harvest on Tuesday.
KNOC has also agreed to pay an extra $25-million if the price of Canadian natural gas exceeds “predetermined levels over the next two years.”
The Hunt package includes 52.9-million barrels of oil equivalent proved and probable reserves, and 152,000 net hectares of undeveloped lands.
Scotia Waterous Inc. was the sole financial adviser to Hunt in the deal.
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