A Calgary-based energy company is crediting its recent success to the acquisition of a natural gas and petroleum firm in Europe.
Calgary based Tenaz Energy announced strong third quarter results earlier this week.
Production volumes jumped up 48 per cent compared to last year’s second quarter, “reflecting a full quarter of production from Tenaz Energy Netherlands (TEN),” the company said in a press release.
“We have a nice asset in Canada, but it’s relatively small in comparison to the rest of our assets, and really, most of our growth is going to be outside of Canada as well Netherlands and potentially other locations,” Anthony Marino, president and chief executive officer told BNN Bloomberg in a Friday interview.
Earlier this year, the company acquired 100 per cent of the shares of NAM Offshore B.V. from Nederlandse Aardolie Maatschappij B.V., a joint venture between Shell PLC and ExxonMobil Corporation.
The deal was initially announced in July of last year.
A press release from the company said the increase in funds was driven by a full quarter contribution from TEN, which contributed approximately $36.4 million to the funds from operations, partially offset by $2.9 million of residual transaction costs from the TEN acquisition.
It said Tenaz ended its third quarter this year with a net debt position of $55.0 million, as compared to $100.2 million at the end of the second quarter. This was primarily, driven by “free cash flow and, to a lesser extent, a reduction in estimated contingent earn-out consideration.”
Tenaz is a major operator and producer of natural gas in the Dutch sector of the North Sea. Activities include offshore production licenses, pipelines, and the Den Helder Gas Plant, a significant gas processing facility.
The company purchases assets from larger companies and uses technical expertise to improve operations by drilling new wells and enhancing existing facilities to extract more gas and oil.
Before acquiring an asset, a technical study is conducted to determine how a facility fits in their portfolio and how a bid will fair with other competitors.
Marino said they have a tried and true technically based methodology with independent evaluations from McDaniel and Associates Consultants Ltd.
“We end up with, actually two, I think, qualified evaluations to give us a good technical picture,” said Marino. “And when we have a good technical projection, we try to take sort of the controllable risk out of the equation. You still have price risk.”
The company also has operations in Alberta, focusing on oil reservoir development at Leduc-Woodband.