Deal insight

Progress Energy and PETRONAS create strategic partnership in the Montney Shale

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Report summary

Progress Energy has announced a strategic partnership with PETRONAS to develop three of its Montney Shale assets in northeast British Columbia. PETRONAS will acquire a 50% interest in Progress' Altares Lily and Katha properties for Cdn$1.1 billion (US$1.1 billion) made up of an initial cash payment and a subsequent cost carry. In addition the two companies will form a JV to assess the feasibility of an LNG export terminal on the west coast of British Columbia joining a growing ...

What's included

This report contains

  • Document

    Progress Energy and PETRONAS create strategic partnership in the Montney Shale

    PDF 709.08 KB

Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
    • Attractive returns achievable, but heavily dependent on recovery factors
    • Discount rate remains a key variable
    • Metrics stack up well with recent transactions
    • Canadian M&A - the Asian influx
  • Upsides and risks
    • PETRONAS
    • Progress Energy
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 6 images and tables including:

Images

  • Acquired acreage, relative to recent Montney deals
  • Wood Mackenzie forecast - Japan spot price vs. Henry Hub
  • Valuation sensitivity to reserve modelling scenarios and discount rate

Tables

  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Deal analysis: Table 1

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