OIL - BIRCHCLIFF AND ALTAGAS ENHANCE LONG-TERM PARTNERSHIP | Benzinga
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
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