Suffield drilling rights holder delves into oilsands

By Collin Gallant on November 8, 2018.

Medicine Hat News

A Swedish company that moved boldly into the Canadian oilpatch last year by buying the drilling rights to the Suffield block, is now moving strongly into the oilsands.

Officials with International Petroleum Corporation discussed its pending purchase of Blackpearl Resources during a corporate earnings update on Monday, saying that the “transition transaction” will bring one billion barrels of oil into its proven and probable reserves.

“This is exactly the right time in the resource cycle to be pursuing this strategy,” said IPC chairman Lukas H. Lundin. “(This) is another big step in delivering that strategy. The Lundin family is fully committed to remain as a major shareholder of IPC into the future.”

The all-stock deal would create a company with more than $1 billion in market capitalization when the deal is expected to be voted on by shareholders of both firms in early December.

It would also increase by one-third the company’s oil production, which includes conventional oil from Suffield, France and off-shore exploration in Malaysia.

Blackpearl operates a 12,000-barrel-per-day thermal extraction facility near Onion Lake, Sask., and has other proposed projects, including an 80,000-barrel-per-day facility nearer to Fort. McMurray.

IPC president Mike Nicholson said Black Pearl staff would be a “high calibre” addition to Canadian operations.

In late 2017, IPC was created to house the international assets of Lundin Petroleum, a major Norwegian operator, and the Canadian-listed company quickly added huge range in southeastern Alberta in a C$512-million purchase from Cenovus Energy.

That company sought to divest conventional assets to pay down debt as it focused on oilsands operations and takeovers.

On Monday, IPC announced that a “gas optimization” program at Suffield is well underway, and a further phase is contemplated in 2019. Oil drilling as well on the military base, northwest of Medicine Hat, was also completed, which the company states is the first such exploration since 2014.

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