The divestiture of the West Central Alberta package is part of an asset rationalization initiative, which also included the recent sale of the company’s Lloydminster and Southern Saskatchewan properties.
This divestiture programme has repositioned Provident’s portfolio for growth by monetizing non-core properties and focusing financial and technical resources on those assets with growth potential, the company said.
Provident’s previously announced consolidated 2010 capital budget of $142m remains unchanged with approximately $55m directed towards the company’s upstream assets in the areas of Peace River Arch/Dixonville, Northwest Alberta and Southern Alberta.
Tom Buchanan, president and CEO of of Provident Energy Trust, said: “This transaction is another key step towards repositioning Provident as a sustainable growth vehicle and further enhances our financial flexibility moving forward. Management and the board of directors wish to sincerely thank the Provident staff associated with these assets for their dedication and service to Provident.”
The West Central Alberta operating area produces approximately 5,000 barrels of oil equivalent per day (boed), comprised of approximately 70% natural gas and 30% liquids. Total proved reserves were 10.5 million barrels of oil equivalent (mmboe) at September 30, 2009, while proved plus probable (P+P) reserves were approximately 14.6 mmboe. The sale reflects transaction metrics of $38,000 per flowing boed, $18.15 per boe of proved reserves and $13.02 per boe of P+P reserves.
This transaction is expected to close in the first quarter of 2010, with an October 1, 2009 effective date. Proceeds from this asset disposition will be used to reduce outstanding debt under Provident’s revolving term credit facility.
