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Supply Study Supports Infrastructure Acquisition

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Canada / 2016 / Strategic Advisory

$1.7 billion transaction

390,000 bbl/d pipeline capacity

Supply catchment area of approximately 25,000 km

Provided long-term supply outlook

Challenge

  • The client was investing in a complex heavy oil midstream infrastructure asset in Alberta and Saskatchewan
  • The heavy oil supply came from a number of geologically complex formations
  • In order to ensure that the infrastructure would serve a long-term supply, the client needed to understand the uncertainties pertaining to future oil production in the area

Solution

  • Sproule experts prepared low, best and high estimates for potential heavy oil volumes, with a forecast extended out to 2045
  • Multiple data sources were used to create production forecasts, which were then evaluated using numerous criteria, including catchment area, operators, production technology, thermal production and more
  • Oil and gas price forecast sensitivities were used to evaluate the uncertainty of future production volumes

Value

  • Sproule’s technical expertise supported the client’s decision to close on a $1.7 billion opportunity in heavy oil pipeline systems
  • Sproule provided the client with an independent production supply sensitivity analysis that allowed them to evaluate the risk and uncertainty pertaining to the investment opportunity
  • Sproule’s analysis provided the client with the comfort they needed to commit to the deal