Paramount to sell Resthaven/Jayar assets in Canada for $340m

Paramount Resources has reached a $340m agreement to divest its oil and gas properties, as well as related infrastructure, at Resthaven/Jayar in Alberta, Canada, to Strath Resources.

Under the terms of the deal, Strath will offer $170m in cash and 85 million Strath common shares. Paramount will also receive ten-year warrants to acquire 8.5 million Strath common shares.

Once the transaction is closed, Paramount will hold a 16% equity interest in Strath.

Paramount president and CEO Jim Riddell is expected to join Strath’s board of directors.

The assets to be sold include 201 sections of land, with proved reserves of 6.3MMBoe and proved plus probable reserves of 8.1MMBoe.

In April, sale volumes from the assets stood at 5,300Boe/d.

Riddell said: “We believe this transaction provides our shareholders with a compelling opportunity to realise meaningful value on our assets in the Resthaven/Jayar area.

“The cash consideration being received will be re-deployed to continue to develop and grow production from our core assets and further strengthens our already strong balance sheet and liquidity position.

“In addition, our shareholders will participate in the upside of Strath’s combined Montney asset-base at Kakwa, through our significant shareholdings in Strath.”

Noting that the transaction meets the company’s disposition target for this year, Paramount revealed that it will continue to pursue non-core sales.

Pro forma for the transaction, Strath is expected to have around 21,300Boe/d of production.

The transaction will allow Paramount to focus on developing its core Montney assets at Karr and Wapiti in the Grande Prairie Region, and Montney and Duvernay assets in the Kaybob Region.