AltaGas Purchases Midstream Assets
AltaGas Ltd. (TSX:ALA) has agreed to purchase a 25 percent stake in private midstream company Petrogas Energy Corporation in exchange for 2.8 million shares of AltaGas. At a designated price of $35.69 a share, the total purchase comes to approximately $99.9 million. The acquisition is expected to close on October 1, 2013.
Petrogas receives approximately $2.7 billion in annual revenue and has $750 million in total assets. The company’s midstream operations include 1,500 rail cars and 24 terminals that handle an average of 100 thousand bbls/d. In addition to expanding its midstream assets, this partnership should allow AltaGas to more efficiently move natural gas and crude oil to meet market demand.
Americia’s Fragile Oil Production
It might be surprising to you that the vast majority of U.S. oil wells produce, on average, less than ten barrels of oil per day on an annual basis. Perhaps even more surprising, more than one third of U.S. wells produce less than just one barrel each day. Most of these low production “stripper wells” are on their last legs, which means that U.S. oil output is more fragile than many might think. But while these wells are dying, a new breed of oil well is thankfully emerging in order to pick up the slack. To learn more about these wells, and how they are making investors rich, click here.