Enerplus sells majority interest in Glauc C oilfield to Journey Energy

By COLLIN GALLANT on August 16, 2022.

cgallant@medicinehatnews.com@CollinGallant

Enerplus has sold its majority interest in the Glauc C oilfield on Medicine Hat’s northeast edge for $140 million to a Calgary based junior oilfield producer with plans to grow.

Journey Energy states in a company release announcing the sale in late July that the oil-weighted acquisition of the field and another from Enerplus will bring its own production above 10,000 barrels per day.

The “transformational” acquisition of the low decline field adds 13.8 million barrels of proved reserves to the Calgary-based company, including other wells in the Kaybob, Ferrier, and Ante Creek areas.

They acquire 75 per cent of the Glauc C field from Enerplus, which operated the field that until late 2020 was also partly owned by the City of Medicine Hat.

It owned a one-quarter non-operating stake in the field since the mid-1980s before it sold to private exploration firm Cache Islands in late 2020. The price at that point netted the city about $20 million, the majority of which was paid in cash.

At that point, it was seen as a continuation of a wind-down from the oilpatch by the city after oil prices plunged during the pandemic year.

Since then a historic run up of prices this year due to global conflict and other factors pushed world prices above $130, though oil futures were trading at about US$90 on Monday.

City administrators have since defended the deal stating conditions were right at the time and the prospect of capital spending on planned enhanced oil-recovery projects at the field were beyond the city’s capabilities.

The recent deal for the net 400 wells includes $80 million in cash, $14 million in shares of Journey, and the balance in an interest-bearing $45-million loan from Enerplus due in October 2024.

Enerplus, which had also been marketing its share of the Glauc C oilfield for sale, has increasingly focused its activity in the Bakken Region of North Dakota.

Remaining Canadian properties in the Enerplus portfolio are still being offered for sale.