Pengrowth announces the sale of non-core Alberta assets
Pengrowth Energy Corporation today (Oct. 18) announces that it has entered into an agreement for the sale of the vast majority of its remaining non-core legacy assets in Alberta for nominal cash consideration and the assumption of abandonment and reclamation liabilities. The sales package encompasses a collection of widely dispersed, mature legacy assets from 36 properties and over 270 facilities and 1,600 wellbores. The combined assets generated average daily production of approximately 5,500 barrels of oil equivalent per day (boe per day) (weighted approximately 80 per cent towards natural gas) during the second quarter of 2017 and had Proved plus Probable reserves of 21.3 million boe assigned to them as at December 31, 2016, according to the independent reserve evaluators GLJ Petroleum Consultants Ltd.
The sale is expected to generate material savings in aggregate operating expenses as well as general and administrative costs. These cost savings, when combined with the sale proceeds result in the transaction being neutral to funds flow.
The success of its asset sales process has allowed Pengrowth to materially streamline its asset portfolio, resulting in the Company’s focus going forward being on its two key, 100 per cent operated growth assets at Lindbergh and Groundbirch. These assets will form the foundation of Pengrowth’s growth strategy over the next five years and are expected to provide the company with long-term, low cost growth opportunities to drive production and funds flow growth. Upon completion of this sale, Pengrowth’s Alberta assets include its Lindbergh thermal oil, Quirk Creek and Fenn Big Valley assets.
The effective date of the sale is October 1, 2017 and closing is expected to occur in the fourth quarter of 2017, subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.