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Alberta natural gas has been out of favour for years, but Bonavista Energy Trust`s $694-million purchase of predominantly natural-gas assets in Central Alberta from EnCana Corp. on Thursday shows sentiment may be turning.
A combination of declining costs, new technologies, acceptable royalties and tightening North American supplies made the Alberta acquisition compelling even at today`s depressed natural-gas prices (they closed yesterday at US$3.67 per million British thermal units in New York) -- and very attractive if prices recover to the US$5 to US$6 per thousand cubic feet range, said Keith MacPhail, Bonavista chief executive.
"There is probably more upside to gas than there is downside at this point," he said in an interview. "We believe that gas has a future, and we are not afraid to go long gas, especially at this time."
The mid-sized trust purchased properties known as the Hoadley trend west of Red Deer that produce 60 million cubic feet of natural gas equivalent a day, or 11,400 barrels of oil equivalent per day, increasing its production by 22% to about 63,000 boe/d.
EnCana, Canada`s largest natural-gas producer, said the assets were non-core to its portfolio, which is increasingly made up of large shale gas projects in the United States.
Read the full article here.
A combination of declining costs, new technologies, acceptable royalties and tightening North American supplies made the Alberta acquisition compelling even at today`s depressed natural-gas prices (they closed yesterday at US$3.67 per million British thermal units in New York) -- and very attractive if prices recover to the US$5 to US$6 per thousand cubic feet range, said Keith MacPhail, Bonavista chief executive.
"There is probably more upside to gas than there is downside at this point," he said in an interview. "We believe that gas has a future, and we are not afraid to go long gas, especially at this time."
The mid-sized trust purchased properties known as the Hoadley trend west of Red Deer that produce 60 million cubic feet of natural gas equivalent a day, or 11,400 barrels of oil equivalent per day, increasing its production by 22% to about 63,000 boe/d.
EnCana, Canada`s largest natural-gas producer, said the assets were non-core to its portfolio, which is increasingly made up of large shale gas projects in the United States.
Read the full article here.