Murphy Oil Corp. has agreed to sell Houston-based Plains AllAmerican Pipeline LP its Canadian crude oil pipeline and truckingoperation for US$155 million, including inventory. The salereflects Murphy’s announcements recently to increase its upstreamcapital budget this year, targeting deepwater Gulf of Mexico andnortheastern British Columbia natural gas wells.
Plains will pick up approximately 450 miles of crude oil andcondensate transmission mainlines and associated gathering andlateral lines and about 1.1 MMbbl of crude oil storage and terminalcapacity in Kerrobert, SK. Plains also would acquire the currentlyinactive 108-mile mainline system and 121 trailers used mostly forcrude oil transportation. Murphy agreed to continue to transportproduction from fields now delivering approximately 11,000 bbl/d tothe pipeline systems under a new long-term contract.
Murphy CEO Claiborne P. Deming said the sale reflected “ourcontinuing efforts to rationalize non-core assets and demonstratesour commitment to increasing shareholder wealth.”
Last October, Murphy acquired gas-rich Beau Canada ExplorationLtd. for US$255 million, which doubled its Canadian production andexposure (see Daily GPI, Oct. 6,2000). In December, the El Dorado, AR independent said it wasupping its capital budget to $692 million for 2001, an increase of18%, with three-quarters allocated to upstream operations.
Then, in February, Murphy told the Canadian National EnergyBoard that it expected to achieve production of up to 310 MMcf/d innortheastern British Columbia this year (see Daily GPI, Feb. 12).Beau Canada was one of its partners in the Ladyfern prospect inAlberta and British Columbia. At the time of the sale, Deming saidthat Beau Canada represented a “very targeted niche acquisitionthat allows us to significantly expand our Canadian gas exposure inareas we know well and like a lot.” The purchase included proved,plus probable risked reserves of 48.2 MM Boe, which is about 74%natural gas.
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