HEADLINES: Canada's LNG Outlook Gets Boost; Exxon Mobil Reportedly Shopping GoM Assets
There was big news in Canada this week, and the country’s beleaguered energy sector may be better for it. The $40 billion LNG Canada two-train project and the $6.2 billion Coastal Gaslink pipeline to northeast British Columbia both received final investment decisions this week. The news was welcomed by the Canadian government. Prime Minister Justin Trudeau said the announcement represents the largest private sector investment project in Canadian history and touted the project’s partners’ confidence in the country’s ability to develop energy that “takes the environment into account.” The main target for the project’s partners—which includes Shell, Petronas, PetroChina, Kogas and Mitsubishi—is the rapidly growing natural gas demand in Asia.
In A&D news, Encana is exiting the San Juan Basin, further zeroing in on its four-basin strategy. Denver-based DJR Energy agreed to acquire Encana’s San Juan assets in norther New Mexico for $480 million. The assets include about 182,000 net acres. Production from the assets averaged roughly 5,400 barrels of oil equivalent per day in 2017.
Husky Energy said it formally offered to acquire all the outstanding common shares of MEG Energy. Husky made an unsolicited bid on Sept. 30 to acquire rival MEG in a deal valued at nearly $5 billion dollars, including debt.
Finally, a Reuters report said that Exxon Mobil is exploring the sale of many of its U.S. Gulf of Mexico assets, as higher prices prompt the world’s largest publicly traded oil company to review its portfolio. The company is focusing on promising acreage in offshore areas such as Guyana and Brazil and onshore in the Permian Basin. Exxon Mobil has asked a small number of parties to gauge their potential interest in the company’s gulf assets, ahead of deciding how to proceed. Reuters cited two sources as saying that any sale would likely happen next year.