Dynegy Buys Processing Assets in Alberta
Dynegy Canada Inc., a subsidiary of Houston-based Dynegy Inc.,
announced Friday that it has acquired the midstream gas processing
facilities and gathering lines of Compton Petroleum Corp. for an
estimated $39 million.
Included in the sale were the Mazeppa and Gladys gas plants in
southern Alberta and about 78 miles of associated gathering lines.
The two facilities have a combined capacity to process 97 MMcf/d of
In addition, the two companies worked out an incentive payment
arrangement under which Dynegy Canada will pay Compton between a
total of $8 million and $16 million, depending on the productivity
of the wells, to drill up to a maximum of 50 new wells in the
Mazeppa/Nanton area. This would be in addition to the $39 million
for the processing facilities. The gas would be processed through
the Mazeppa and Gladys plants, according to a spokeswoman in
Houston. Under the deal, Compton also was guaranteed set rates for
processing and transporting its gas.
"The acquisition of these midstream assets is a key step in our
strategy to re-establish Dynegy's Canadian asset base," said Dynegy
Chairman Chuck Watson in Houston. "The Mazeppa facilities
complement our existing gas marketing and trading business. In
addition, our continuing relationship with Compton will generate
future opportunities to add throughput to these facilities."
The deal has made Compton debt free and has given it an
available line of credit in excess of C$52 million to "aggressively
pursue its drilling program in southern Alberta," noted Compton
President Ernie Sapieha. "The drilling arrangement with Dynegy and
their planned expenditures will allow us to maintain low finding
and development costs while actively pursuing exploration
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