Pengrowth Energy Corp. (NYSE: PGH) is selling the remainder of its Swan Hills assets in North Central Alberta to an undisclosed buyer for C$185 million (US$134.7 million), the company said April 25.
The sale is part of Calgary, Alberta-based Pengrowth's strategy to streamline its portfolio and lower debt and follows several other divestitures.
In total, Pengrowth is set to receive C$707 million (US$514.8 million) in proceeds from noncore asset sales in 2017. The company plans to use the sale proceeds to pay down its debt.
Upon closing of all its noncore asset sales so far in 2017, Pengrowth said its debt is projected to fall by about 60% since year-end 2016.
The company's remaining Swan Hills assets generated average daily production of about 5,150 barrels of oil equivalent per day (boe/d), weighted about 94% towards liquids, during fourth-quarter 2016. Proved plus probable reserves were 21 million boe at year-end 2016, according to the independent reserve evaluators GLJ Petroleum Consultants Ltd.
Pengrowth said it expects the sale to impact its average production guidance by about 3,400 boe/d/. This will result in revised 2017 production to be between 43,500 and 45,500 boe/d.
The company anticipates the sale will close in May, subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.
BMO Capital Markets Inc. was Pengrowth's financial adviser on the transaction, which was effective Jan. 1. (C$1 = US$0.73)
RELATED:
Pengrowth Continues Noncore Sales With Montney Divestment
Pengrowth To Sell Swan Hills Assets In North-Central Alberta
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