Pen­growth an­nounces the sale of non-core Al­berta as­sets

The McLeod River Post - - The Patch -

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.

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