Pengrowth Energy to offload remaining Swan Hills assets in Canada for $150m


Oil and natural gas company Pengrowth Energy has signed an agreement to divest its remaining Swan Hills assets in North Central Alberta, Canada, to an undisclosed buyer for $150m.

The sale of the assets was previously terminated in July this year after the then-buyer failed to arrange financing for the transaction and the deal fell through.

When combined with the approximately $18m deposit from the previously terminated initial sales process, Pengrowth will realise about $168m in connection with the proposed divestiture.

The assets produced around 5,060 barrels of oil equivalent per day (boe per day) on average during the second quarter of this year.

As of December last year, the acreage contained 31 million boe of proved plus probable (2P) reserves.

"Once the transaction is completed, the sale will mark the company's exit from the Swan Hills area, while providing it with additional financial liquidity."

Once the transaction is completed, the sale will mark the company's exit from the Swan Hills area, while providing it with additional financial liquidity.

The sale is expected to close during the fourth quarter of this year.

It is subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.

The current deal is consistent with the company’s strategy to downsize its operations in order to reduce its outstanding debt.

In July this year, the company closed the sale of a portion of its Swan Hills assets for $185m.

During the same period, it signed an agreement to offload its Olds / Garrington area assets in Central Alberta for $300m to private firm owned by a Canadian life insurance company.