Pengrowth shares climb

Equity • Pengrowth Energy Corp. rose the most in more than four years a day after the Calgary-based oil producer said it had reached its asset-sales target.

The shares gained 8.3 per cent to $5.88 at the close in Toronto, the most since March 2009. The stock has advanced 19 per cent this year.

Pengrowth said Tuesday it has agreements to sell $700 million of non-core assets that will be used to fund the first phase of its $590 million thermal oilsands project at Lindbergh. Most of the assets, in southeast Saskatchewan, are being sold to Calgary junior Torc Oil & Gas Ltd.

The asset sales will help reduce debt and expand production, said Dirk Lever, an analyst at AltaCorp Capital Inc. in Calgary.

“Concerns about Pengrowth’s debt levels should now be put to rest,” he said in a note to clients Wednesday. “With added financial flexibility, we are further confident in Pengrowth’s ability to execute the ramp up” of production at Lindbergh.

Pengrowth said it expects to close the deal by September. The company on Monday said it had received regulatory approval for the Lindbergh project.