Midcoast Energy subsidiary Midcoast Canada Operating Corp.bought the Calmar gas treating plant and gathering system inAlberta from Probe Exploration Inc. for C$20 million (US$13.2million). The company has its sights on similar acquisitions in thefuture.

The assets include a 30 MMcf/day amine sweetening plant, 30miles of 10-inch and 6-inch gathering pipeline and about 4,000 hpof compression near Edmonton, AB. The system currently gathers andtreats about 26 MMcf/day of sour gas from 27 producing wellsoperated by Probe and Courage Energy Inc. The Calmar gas plant isthe only “zero emissions” sour gas treating plant in theLeduc-Woodbend area of Alberta.

In conjunction with the purchase, Probe made a gas gathering andtreating agreement with Midcoast, including the long-termdedication of Probe’s reserves in the Leduc Field, a right of firstrefusal agreement on new or existing midstream assets within adefined 390 square mile area of interest, and assignment toMidcoast of an existing third-party gathering and treatingagreement.

Dan Tutcher, president of Midcoast, said, “This acquisition isthe first step toward our goal of developing a larger midstreamasset base in Canada. We believe the environment in Canada isfavorable for other production companies to explore the option ofmonetizing their midstream natural gas assets in order to providecapital for the future development of their reserve base. We willcontinue to aggressively seek such acquisition and/or joint ventureopportunities to further expand our presence in the Albertaregion.” Probe and Midcoast are examining other potential jointbusiness opportunities.

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