Strathcona Buys Pipestone, Joins Canada's Top Five Producers

Researched by Industrial Info Resources (Sugar Land, Texas)--It's as predictable as a Doris Day movie: When commodity prices soften, oil and gas companies nourish themselves by gobbling up their smaller peers. With oil and gas down from their post-pandemic highs, it is enough to push at least one Canadian oil and gas producer to sell off: Pipestone Energy Corporation (Calgary, Alberta), which announced it will be purchased by Strathcona Resources Limited (Calgary) in an all-stock deal, which will make Strathcona the fifth-largest oil and natural gas liquids (NGL) producer in Canada. Industrial Info is tracking more than US$710 million in active or proposed projects involving Pipestone, and multiple facilities run by both companies.

The transaction is expected to close early in the fourth quarter of 2023, pending approval from shareholders and regulators. The new company, which will be publicly traded and retain Strathcona's name, is expected to have a market capitalization of C$8.6 billion (US$6.49 billion).

"We are proud to have grown Pipestone from 152 to 35,162 barrels of oil-equivalent per day (BOE/d) in just four short years, and now the combination with Strathcona allows Pipestone shareholders to share in future growth and value creation for decades," said Gord Ritchie, the chairman of the Board of Directors for Pipestone, in a press release.

Pipestone was among the Canadian oil and gas producers to be affected by the massive outbreak of wildfires that swept the country over the past three months. About 20,000 BOE/d of production in the Grande Prairie area was curtailed in mid-May, although the company returned to normal production in the following weeks.

Pipestone operates and manages a natural gas compressor station in Wembley, Alberta, which is just 15 miles west of Grande Prairie and owned by Keyera Corporation (Calgary). The 120 million-standard-cubic-foot-per-day station services the Eastern Block of the Pipestone Field, where Pipestone and contractor Precision Drilling Corporation (NYSE:PDS) (PDC) (Calgary) began drilling 11 new wells earlier this year. Following the program's completion toward the end of 2023, Pipestone aims to drill 10 to 15 new wells as part of its 2024 program.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can learn more about the Wembley station in a detailed plant profile, and read detailed project reports on the 2023 and 2024 drilling programs in the Eastern Block.

Pipestone owns and operates the Grovedale Sour Natural Gas Processing Plant in Calgary, Alberta, which produces 3,000 barrels per day (BBL/d) of NGL from 20 million standard cubic feet per day of natural gas from the Central Block of the Pipestone Field. Pipestone and Precision Drilling began drilling 18 new wells earlier this year. Following the program's completion for this year, Pipestone aims to drill 15 to 20 new wells as part of the 2024 program. Subscribers can learn more about the Grovedale station in a detailed plant profile, and read detailed project reports on the 2023 and 2024 drilling programs in the Eastern Block.

Strathcona, which is owned by oil and gas-focused private equity firm Waterous Energy Fund (Calgary), has been buying up its smaller rivals in recent years, gradually broadening its footprint in the industry. Strathcona acquired Stickney Resources Limited in early 2022, adding Stickney's 25,000-BBL/d Tucker Lake oil sands production plant near Cold Lake, Alberta, to its portfolio. Tucker Lake is preparing to undergo a 15-day maintenance turnaround in September. Subscribers can learn more from a detailed plant profile and project report.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).