A unit of Korea National Oil Corp. (KNOC) has agreed to buy producing and undeveloped assets from Canadian subsidiaries of Hunt Oil Co. of Dallas for C$525 million (US$521 million).

Included in the deal are 52.9 MMboe of proved plus probable reserves, as well as about 377,000 net acres of undeveloped land; complementary land positions in Willesden Green, the Peace River Arch and southern Alberta; and access to resource plays in the Willesden Green area of Alberta and the Horn River Basin of British Columbia.

In the third quarter the assets produced about 11,720 boe/d, made up of 1,085 b/d of light oil, 45.5 MMcf/d of natural gas and 3,050 b/d of natural gas liquids (NGL), according to the companies.

State-owned KNOC's Harvest Operations Corp. is acquiring the assets from Hunt Oil Co. of Canada and Hunt Oil Alberta Inc. The deal contains a provision that allows for an additional $25 million payment by Harvest in the event that Canadian natural gas prices exceed pre-determined levels over the next two years.

KNOC has agreed to inject C$525 million of additional capital into Harvest in exchange for equity to fund the acquisition at closing, which is expected to occur by Jan. 31, subject to regulatory approval.

Harvest, which was acquired by KNOC in October 2009, is active in Canada in the exploration, development and production of crude oil and natural gas and in the downstream refining and marketing of distillate, gasoline and fuel oil. Harvest upstream production is weighted approximately 70% to crude oil and liquids and 30% to natural gas.

Hunt Oil of Canada will maintain an operating presence in Calgary with its exploration and development program initially focused on the Western Canadian Sedimentary Basin, Hunt said.

In August South Korea's STX Energy Co. paid Encana Corp. C$152 million (US$144 million) to acquire the Maxhamish natural gas field in northwestern Canada (see Daily GPI, Aug. 31). And last year Calgary-based Kitimat LNG Inc. said it struck a deal for Korea Gas Corp. to acquire up to 40% of Kitimat LNG's production and an option to acquire an equity stake in Kitimat LNG's planned liquefied natural gas export terminal in Bish Cove, BC (see Daily GPI, Dec. 13; June 2, 2009).

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.