Taqa North, the Canadian unit of Abu Dhabi National Energy Co (TAQA), has bought more than 12,000 hectares of land for $63.2 million in two blocks at a basin in British Columbia, Canada, that are expected to become major sources of shale gas supplies.
"TAQA will fully self-finance the acquisition with cash," Mohammed Mubaideen, the company's investor relations manager, told news agency Zawya Dow Jones on Sunday. "We have $3 billion in cash and credit facilities."
The land, located in the Horn River Basin in northeastern British Columbia, was the last of 10 large blocks of land made available for sale in the basin for its "highly competitive and prospective nature", TAQA said in an emailed statement dated June 30.
Canada's Horn River Basin is largely made up of shale sedimentary rock, which may produce shale gas, and has been increasingly targeted for natural gas exploration over the past few years, according to British Columbia's Ministry of Energy website.
"TAQA North will begin drilling appraisal wells this winter and we are hopeful that this will lead to one of our largest drilling programs to date over the next five to 10 years," TAQA North Managing Director Frederic Lesage said in the statement.
The land "will play a significant role in TAQA North's growth and future production", Lesage said.
Companies have bought $1.3 billion of land and drilled 75 wells in the Horn River Basin in the last three years for "the wide spread belief that the basin will provide a major North American source of natural gas in the future", TAQA added.
However, according to Mubaideen, it's too early to quantify how much shale gas can be extracted from TAQA's two blocks of land - covering areas of 7,481 hectares and 5,315 hectares - until appraisal wells are drilled.
TAQA North is Canada's 12th largest oil and gas production and exploration company, Mubaideen said.
In 2008, the company's average production was 93,735 barrels of oil equivalent a day, including 21,801 barrels a day of oil, 10,597 barrels a day of natural gas liquids and 368 million cubic feet of natural gas. It had 1.7 trillion cubic feet of 2P, or proven and probable, gas reserves as of Dec. 31.
TAQA is majority owned by the Abu Dhabi government and has 24.9 percent of its shares listed on the Abu Dhabi stock market.
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