Abu Dhabi’s Overseas Energy Play

Abu Dhabi is putting a new twist on the concept of recycling petrodollars by recycling its earnings into Canadian energy properties.

PrimeWest Energy Trust soared 32.7%, or $6.32, to close at $26.25 on the New York Stock Exchange on Monday, after Abu Dhabi National Energy — which is known by the acronym TAQA — said it would buy the concern for $26.75 per share, or $2.4 billion. Including assumed debt, the deal was valued at $5 billion.
PrimeWest is a Calgary-based oil-and-gas royalty trust that acquires, develops, produces, and sells natural gas and crude oil.

The actual deal was transacted by Abu Dhabi’s Canadian subsidiaries TAQA North and 1350849 Alberta. “This acquisition makes TAQA North one of the top 14 producers in Canada,” said Peter Barker Homek, TAQA’s chief executive. “And an achievement of our strategy to grow to $20 billion in Canadian assets.”

Once completed, the deal will provide TAQA with an additional reserve of 285 million barrels, current production of approximately 61,000 barrels of oil per day, an undeveloped land base of over 1.1 billion net acres, and a large tax pool position of approximately $2.7 billion. According to Abu Dhabi National Energy, TAQA North will have 480 million barrels of reserves and more than105,000 barrels per day of production upon completion of the deal.

This is the latest in a series of deals involving Middle Eastern groups, flush from high energy prices, that have moved cash into western assets, although they rarely add petroleum properties to their portfolios.

Forbes