Sale would provide capital for development

Taqa, Abu Dhabi’s NOC, is looking to sell some of its assets in North America, according to a report by Bloomberg.

Founded in 2005, Taqa is Abu Dhabi’s primary energy holding company.

The company operates or has interest in oil and gas operations in the North Sea, Iraq and North America. Average production from its oil and gas properties was 137.3 MBOPD in 2016. Taqa also owns stakes in power plants in many locations, including the UAE, India, Oman, Saudi Arabia and North America.

Along with its energy holdings, Taqa is one of the largest water desalination companies in the world, as the majority owner of plants supplying more than 90% of Abu Dhabi’s water.

North American properties focus on conventional development

In North America, Taqa reports holding 1.22 million net acres of producing land with average production of 80.8 MBOEPD. The company’s Canadian properties are primarily in Saskatchewan, Alberta and British Columbia. While the company has U.S. holdings in Montana, North Dakota and Wyoming, Canada is Taqa’s primary North American focus.

According to Saeed Hamad Al Dhaheri, Taqa CEO, the company’s businesses in North America and Europe are cash-flow positive. The company is now looking to sell its more costly wells in North America to provide capital for additional development.

An analyst for the Chartered Institute for Securities & Investment also commented on potential sales: “The sale of some assets may increase liquidity and will allow Taqa to focus on its oil and gas assets. It is important to see them concentrating in areas in which there is potential.”

$6 billion impairment taken in 2016

Taqa released its 2016 earnings at the end of March, showing a net loss of 18.2 billion dirhams, or $5.17 billion. This loss was primarily due to a $6 billion impairment that was taken last year, $3 billion of which was taken on North American oil and gas properties.

Like many other oil and gas companies, Taqa made a significant effort to remain profitable during the downturn. The company reports that it has cut costs by $1.2 billion over the last two years and reduced capital spending by nearly twice that. The resurgence in commodity prices and activity has created an opportunity for Taqa, though, and Al Dhaheri reports the company will invest nearly $500 million in 2017, up from $300 million in 2016.

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