Horizon North Logistics has entered into two new partnerships with First Nations in the Fort McMurray region, an area where analysts note that the company may need those relationships in order to win new contracts for workforce lodging and catering.
Horizon North announced on Tuesday new partnerships with the Chipewyan Prairie Dene First Nation south of Fort McMurray and the Athabasca Chipewyan First Nation north of Fort McMurray, as well as the $14-million acquisition of the Moose Haven Lodge from the Chipewyan Prairie band.
Moose Haven Lodge is located near Janvier, in the heart of what has been called “SAGD central,” with multiple large-scale projects operated by companies including Cenovus Energy, MEG Energy, Devon and ConocoPhillips.
"We have invested significantly in our industrial business park, with Moose Haven Lodge as a vital piece to its future development," Chipewyan Prairie chief Vern Janvier said in a statement.
"We are pleased that Horizon North purchased the lodge and joined with us to finalize our new camp and catering partnership. As partners, we look forward to generating new business opportunities in our territory which will benefit the Nation and all our members."
Garry Flett, CEO of Athabasca Chipewyan-owned Acden, called the deal "significant."
"The reduction in oilsands activity is certainly well-documented. Less talked about, however, is that opportunities are still plentiful in the Fort McMurray area with the right partners,” Horizon North CEO Rod Graham added.
While the lodge may be the primary asset in the deal announcement, the partnerships are of greater importance, said analysts with GMP FirstEnergy.
“We believe the value of this acquisition will be realized through additional catering contract wins for oilsands projects in the South Fort McMurray region. It is our understanding that the Chipewyan Prairie is uniquely positioned to win these contracts and Horizon North is their sole partner,” wrote analyst Ian Gillies in a research note released on Tuesday, adding the benefit of First Nations partnering also exists in the mining region north of the city.
“Our understanding is that strong relationships with First Nations are now of paramount importance for securing accommodations contracts in the north of Fort McMurray oilsands area.”
The new partnerships add to 21 existing agreements Horizon North has with First Nations across Canada, the company said. They are also “foundational elements” of its strategy in the Fort McMurray region.