Harvest Operations Acquires BlackGold Oilsands Project From Korea National Oil: Harvest Operations is Expanding its Oil Sands Business - Deal Analysis From GlobalData

Introduction

Harvest Operations Corp. (Harvest) has completed the acquisition of BlackGold Oil Sands Project, from Korea National Oil Corporation (KNOC), for a purchase consideration of CAD 374m ($368.4m). The acquisition was financed by Harvest with the issuance of shares to KNOC.

BlackGold Oil Sands Project is located in northeastern Alberta near Conklin and is in close proximity to a number of major oil sands developments. The project has Energy Resource Conservation Board (ERCB) approval for a Phase 1 project of 10,000 bpd and has made an application for a Phase 2 project that would increase production to 30,000 bpd.

The project had 259 mmboe of proved and probable (2P) reserves on December 31, 2009 as determined independently by GLJ Petroleum Consultants Ltd (GLJ Petroleum) in accordance with National Instrument 51-101 and an incremental 30 million barrels (MMBbl) of best estimate contingent resource.

Project cost for the first phase (2010-2012) of production up to 10,000 bpd is estimated to be in between CAD 450 ($443.28) m – CAD 500 ($492.54) m which includes drilling cost of 15 Steam Assisted Gravity Drainage (SAGD) well pairs for start up. The steam generation and fluid processing facility is fixed at a cost of CAD 312m ($307.34m).

The transaction implies a deal value of $1.42 per boe of 2P reserves.

Scope

- Rationale behind Harvest Operations acquiring BlackGold Project from KNOC
- Strategic Benefits for the companies involved
- Geography covered -Canada

Highlights

Reasons to buy

- Develop a sound undestanding of the major M&A's, Partnerships, And Joint Ventures taking place in North American Oil & Gas industry
- Identify the most lucrative segments to leverage on the growth oppurtunities available in the Canadian oil & gas market
- Get a detailed analysis of a deal to enable you to take better decisions

Report Highlights

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TABLE OF CONTENTS

1 Table of Contents 1
1.1 List of Tables 1
1.2 List of Figures 1
2 Global Data Deal Analysis 2
2.1 Summary 2
2.2 Deal Overview 2
3 Harvest Operations Acquires BlackGold Oilsands Project From Korea National Oil 2
3.1 Deal Overview 2
3.2 Deal in Brief 2
3.3 Harvest will Develop BlackGold More Efficiently 2
3.4 Large Reserves of Oil Sands in Canada are Attracting Many Companies 3
3.5 BlackGold Oil Sands is a Beneficial Project as its Production will Increase with Development Phase 4
3.6 KNOC intends to expand its business through acquisitions and partnerships 5
3.7 Deal Financials and Valuations 8
3.7.1 Companies Involved 8
3.7.2 Deal Financials 8
3.7.3 Detailed Target Information 8
3.7.4 Production and Reserves Information 9
3.7.5 Transaction Implied Values 9
3.7.6 Commodity Prices Information 9
3.7.7 Detailed Acquirer Information 9
3.7.8 Detailed Vendor Information 10
4 Appendix 11
4.1 About Energy eTrack 11
4.2 Methodology 11
4.2.1 Coverage 11
4.2.2 Secondary Research 12
4.2.3 Primary Research 12
4.2.4 Expert Panel Validation 12
4.3 Contact Us 13
4.4 Disclaimer 13
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LIST OF TABLES

1.1 List of Tables
Table 1: Oil Sands Transaction Details, Canada, 2009-2010 3
Table 2: KNOC, Asset Acquisition Details,2009-2010 7
Table 3: Companies Involved 8
Table 4: Financials of the Deal 8
Table 5: Target Information 8
Table 6: Target’s Production and Reserves Information 9
Table 7: Company Valuation Multiples 9
Table 8: Commodity Prices in $, Last Close 9
Table 9: Acquirer Information 9
Table 10: Vendor Information 10
LIST OF FIGURES

1.2 List of Figures
Figure 1: Oil Sands, Canada 4
Figure 2: BlackGold Oil Sands, Canada, 2010 5
Figure 3: KNOC, Operations Map, 2010 6
Figure 4: GlobalData Methodology 11
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