Pengrowth Energy to sell Olds / Garrington area assets in Canada for $300m


Pengrowth Energy has signed an agreement to sell its Olds / Garrington area assets in Central Alberta for a sum of $300m to a company owned by an undisclosed Canadian life insurance firm.

The move follows the recent sale of the company's Swan Hills assets in North Central Alberta for $185m.

The Olds / Garrington area assets comprise a projected average daily production of 13,875 barrels of oil equivalent (boe) per day, and had proved plus probable (2P) reserves of 78 million boe as of 31 December 2016.

Pengrowth will offer facilities and gathering systems related to the oil and gas properties being sold under the deal, in addition to the Olds gas plant.

The company has sold or is in the process selling assets worth a combined $827m this year.

"The entire sale proceeds through the year so far will enable Pengrowth to reduce its debt by more than $1.1bn."

The entire sale proceeds through the year so far will enable Pengrowth to reduce its debt by more than $1.1bn, when added to the $287m of cash on hand the company possessed towards the end of last year.

Pengrowth Energy president and CEO Derek Evans said: "Our efforts and results to date have been transformational for Pengrowth, allowing us to retain our best assets with the most development opportunities and putting us on a path to either renegotiate or refinance our remaining term debt to allow us the flexibility to develop our Lindbergh and Groundbirch assets."

Pengrowth will focus on its Lindbergh thermal project and Groundbirch Montney play once the transaction is cloded, in order to ensure long-term growth in reserves, production and cash flow.

The transaction is slated for completion next month, subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.