Agreement Should Reduce Long-term Operating Costs, Increase
LPGs to Premium Global Markets, and Drive Shareholder Value for
Both Companies
All figures contained in the press release are in Canadian
dollars unless otherwise stated.
CALGARY,
AB, June 13, 2024 /CNW/ - Birchcliff Energy
Ltd. ("Birchcliff") (TSX: BIR) and AltaGas Ltd.
("AltaGas") (TSX: ALA) are pleased to announce an expanded
partnership focused on reducing long-term operating costs and
connecting more liquified petroleum gas ("LPG") into premium global
markets.
As part of the increased partnership, Birchcliff and AltaGas
have entered into a long-term contract operating agreement ("COA")
whereby Birchcliff will take over operatorship of AltaGas'
Gordondale deep-cut gas processing facility (the "Gordondale
Facility"). This will allow Birchcliff to leverage cost
optimization opportunities that exist between its 100 percent owned
and operated gas plant at Pouce
Coupe (the "Pouce Coupe Gas Plant") and the Gordondale
Facility, which are located approximately six miles apart and are
pipeline connected. These optimization opportunities are expected
to drive lower operating costs, reduce downtime, and optimize
natural gas liquids recoveries for Birchcliff, with no net impact
on AltaGas' profitability.
AltaGas will continue to own 100 percent of the Gordondale
Facility with no plans to reduce its ownership. The Gordondale
Facility will continue to operate under the existing long-term
take-or-pay processing agreement between the parties (the
"Processing Agreement"), with Birchcliff as operator for the
remainder of the Processing Agreement's term, which will continue
until at least December 31, 2032.
Birchcliff has also entered into additional long-term tolling
agreements with AltaGas whereby Birchcliff will market additional
LPG volumes through AltaGas' global exports platform, which is
aligned with AltaGas' strategy to grow tolling volumes and cash
flow predictability, while providing Birchcliff with direct market
access to premium LPG netbacks in Asia with Far East Index ("FEI") pricing.
The uniqueness of these agreements is underpinned by Birchcliff
representing 100 percent of throughput volumes at the Gordondale
Facility, which creates opportunities for operational efficiencies
and cost savings within Birchcliff's Gordondale and Pouce Coupe areas. The agreements highlight
the benefits of infrastructure owners and producers partnering to
drive solutions that deliver the best outcomes for all
stakeholders.
About Birchcliff
Birchcliff is a dividend-paying, intermediate oil and natural
gas company based in Calgary,
Alberta with operations focused on the Montney/Doig Resource Play in Alberta. Birchcliff's common shares are listed
for trading on the Toronto Stock Exchange under the symbol
"BIR".
For more information, please
contact:
Chris
Carlsen – President and Chief Executive
Officer
Bruno
Geremia – Executive Vice President and
Chief Financial Officer
Birchcliff Energy Ltd.
Suite 1000, 600 –
3rd Avenue S.W.
Calgary, Alberta T2P 0G5
Telephone: (403) 261-6401
Email: birinfo@birchcliffenergy.com
www.birchcliffenergy.com
About AltaGas
AltaGas is a leading North American infrastructure company that
connects customers and markets to affordable and reliable sources
of energy. The Company operates a diversified, lower-risk,
high-growth Energy Infrastructure business that is focused on
delivering stable and growing value for its stakeholders.
For more information visit
www.altagas.ca or reach out to one of the
following:
Jon
Morrison
Senior Vice President,
Corporate Development and Investor
Relations
Jon.Morrison@altagas.ca
Aaron
Swanson
Vice President, Investor
Relations
Aaron.Swanson@altagas.ca
Media Inquiries
1-403-206-2841
media.relations@altagas.ca
Source of Information
The information contained in this press release as it relates
solely to Birchcliff, its business and operations has been provided
by Birchcliff and the information contained in this press release
as it relates solely to AltaGas, its business and operations has
been provided by AltaGas. Neither Birchcliff nor AltaGas assume any
responsibility for the accuracy or completeness of the information
of the other party or the failure by the other party to disclose
events which may have occurred or may affect the completeness or
accuracy of such information but which are unknown to the other
party.
Forward-Looking Information
Certain statements contained in this press release constitute
forward‐looking statements and forward-looking information
(collectively referred to as "forward‐looking statements") within
the meaning of applicable Canadian securities laws. The
forward-looking statements contained in this press release relate
to future events or Birchcliff's or AltaGas' future plans,
strategy, operations, performance or financial position and are
based on Birchcliff's and AltaGas' current expectations, estimates,
projections, beliefs and assumptions. All statements and
information other than historical fact may be forward‐looking
statements. Such forward‐looking statements are often, but not
always, identified by the use of words such as "expect", "believe",
"anticipate", "potential", "continue", "may", "will", "could",
"might", "should", "would", "maintain", "deliver" and other similar
words and expressions.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward‐looking statements. Accordingly,
readers are cautioned not to place undue reliance on such
forward-looking statements. Although Birchcliff and AltaGas believe
that the expectations reflected in the forward-looking statements
are reasonable, there can be no assurance that such expectations
will prove to be correct and neither Birchcliff nor AltaGas makes
any representation that actual results achieved will be the same in
whole or in part as those set out in the forward-looking
statements.
In particular, this press release contains forward‐looking
statements relating to the COA, the Processing Agreement and the
additional long-term tolling agreements and the anticipated effects
and benefits of such arrangements to Birchcliff and AltaGas
(including: that the COA will drive shareholder value for
Birchcliff and AltaGas; the expanded partnership's focus on
reducing long-term operating costs and connecting more LPG into
premium global markets; that Birchcliff representing 100% of
throughput volumes at the Gordondale Facility creates opportunities
for operational efficiencies and cost savings within Birchcliff's
Gordondale and Pouce Coupe areas;
that the COA will allow Birchcliff to leverage cost optimization
opportunities that exist between the Pouce Coupe Gas Plant and the
Gordondale Facility; that these optimization opportunities are
expected to drive lower operating costs, reduce downtime and
optimize natural gas liquids recoveries for Birchcliff, with no net
impact on AltaGas' profitability; that AltaGas has no plans to
reduce its ownership of the Gordondale Facility; that Birchcliff
will operate the Gordondale Facility for the remainder of the
Processing Agreement's term, which is expected to continue until at
least December 31, 2032; and
statements regarding the additional long-term tolling agreements
including that the agreements are aligned with AltaGas' strategy to
grow tolling volumes and cash flow predictability while providing
Birchcliff with direct market access to premium LPG netbacks in
Asia with FEI pricing.
With respect to the forward‐looking statements contained in
this press release, assumptions have been made regarding, among
other things: Birchcliff's and AltaGas' ability to obtain the
anticipated benefits of the COA, the Processing Agreement and the
additional long-term tolling agreements; prevailing and future
commodity prices and differentials, exchange rates, interest rates,
inflation rates, royalty rates and tax rates; the state of the
economy, financial markets and the exploration, development and
production business; the political environment; the regulatory
framework and the ability to comply with existing and future laws;
future cash flow, debt and dividend levels; future operating,
transportation and other expenses; the ability to access capital
and obtain financing; the timing and amount of capital
expenditures; the sufficiency of budgeted capital expenditures to
carry out planned operations; the successful and timely
implementation of capital projects and the timing, location and
extent of future drilling and other operations; results of
operations; Birchcliff's ability to continue to develop its assets
and obtain the anticipated benefits therefrom; the impact of
competition on Birchcliff and AltaGas; the availability of, demand
for and cost of labour, services and materials; the satisfaction by
third parties of their obligations to Birchcliff and AltaGas; the
ability of Birchcliff to secure adequate transportation for its
products; Birchcliff's ability to successfully market natural gas
and liquids; and the results of the Birchcliff's and AltaGas' risk
management and market diversification activities.
Birchcliff's and AltaGas' actual results, performance or
achievements could differ materially from those anticipated in the
forward-looking statements as a result of both known and unknown
risks and uncertainties including, but not limited to: the failure
to realize the anticipated benefits of the COA, the Processing
Agreement and the additional long-term tolling agreements; global
conflict and their impacts on supply and demand and commodity
prices; actions taken by OPEC and other major producers of crude
oil and the impact such actions may have on supply and demand and
commodity prices; the uncertainty of estimates and projections
relating to production, revenue, costs, expenses and reserves;
general economic, market and business conditions which will, among
other things, impact the demand for and market prices of parties
respective products and their access to capital; volatility of
crude oil and natural gas prices; risks associated with increasing
costs; fluctuations in exchange and interest rates; an inability to
access sufficient capital from internal and external sources;
operational risks and liabilities inherent in oil and natural gas
operations and the occurrence of unexpected events such as fires,
severe weather, explosions and transportation incidents; an
inability to access sufficient water or other fluids needed for
operations; uncertainty that development activities in connection
with the parties' respective assets will be economic; the accuracy
of estimates of production levels; geological, technical, drilling,
construction and processing problems; uncertainty of geological and
technical data; horizontal drilling and completions techniques and
the failure of drilling results to meet expectations for reserves
or production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
accuracy of cost estimates and variances in actual costs and
economic returns from those anticipated; incorrect assessments of
the value of acquisitions and exploration and development programs;
changes to the regulatory framework; political uncertainty and
uncertainty associated with government policy changes; actions by
government authorities; an inability of the parties to comply with
existing and future laws and the cost of compliance with such laws;
dependence on facilities, gathering lines and pipelines;
uncertainties and risks associated with pipeline restrictions and
outages to third-party infrastructure that could cause disruptions
to production; the lack of available pipeline capacity and an
inability to secure adequate and cost-effective transportation for
the parties' products; an inability to satisfy obligations under
Birchcliff's firm marketing and transportation arrangements;
shortages in equipment and skilled personnel; competition;
environmental and climate change risks, claims and liabilities;
potential litigation; default under or breach of agreements by
counterparties and potential enforceability issues in contracts;
claims by Indigenous peoples; unforeseen title defects;
uncertainties associated with the outcome of litigation or other
proceedings involving Birchcliff or AltaGas; risks associated with
the parties' risk management and market diversification activities;
the failure to obtain any required approvals in a timely manner or
at all; the failure to complete or realize the anticipated benefits
of acquisitions and dispositions and the risk of unforeseen
difficulties in integrating acquired assets into operations; the
availability of insurance and the risk that certain losses may not
be insured; and breaches or failure of information systems and
security (including risks associated with cyber-attacks). Readers
are cautioned that the foregoing lists of factors are not
exhaustive. Additional information on these and other risk factors
that could affect results of operations, financial performance or
financial results are included in Birchcliff's and AltaGas' annual
information forms for the financial year ended December 31, 2023 and in other reports filed by
each of Birchcliff and AltaGas with Canadian securities regulatory
authorities.
Birchcliff and AltaGas have included the above summary of
assumptions and risks related to forward-looking information
provided in this press release in order to provide readers with a
more complete perspective on Birchcliff's and AltaGas' respective
future operations. Readers are cautioned that this information may
not be appropriate for other purposes. The forward-looking
statements contained in this press release are expressly qualified
by the foregoing cautionary statements. The forward-looking
statements contained herein are made as of the date of this press
release. Unless required by applicable laws, neither Birchcliff nor
AltaGas undertakes any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE AltaGas Ltd.
