Penn West to sell Slave Point properties in Canada for $148m

Penn West Petroleum has signed an agreement to sell its properties in the Slave Point area of Northern Alberta, Canada for $148m.

The company completed or signed agreements to sell some of its non-core assets for $80m in 2016. The proceeds from the latest sale will bring the total expected cash consideration from asset sales to $230m in 2016.

Penn West expects to close the sale of non-core assets by the end of the second quarter.

The company said its asset disposition programme has increased more than $1bn in cash proceeds since the beginning of 2015.

Penn West senior vice-president David Dyck said: "While we believe that Slave Point offers upside, the extension of our Viking play and recent Cardium performance provide us with ample development and growth opportunities and the most attractive rates of return in our portfolio.

"We are confident that our over 1,400 sections of land between those two plays will give us significant running room going forward."

The latest sale will enable Penn West to reduce its corporate per barrel operating costs.

Expected production declines for this area are 35% and operating costs are estimated to increase to approximately $24 per boe over the remainder of 2016, due to limited development capital allocated to Slave Point during 2015 and 2016.

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Image: The latest sale will bring the total expected cash consideration from asset sales for Penn West to $230m in 2016. Photo: courtesy of anankkml / FreeDigitalPhotos.net.