Canadian oil-and-gas producer Husky Energy has signed an agreement to divest C$595m ($461m) worth of assets in southwest Saskatchewan to oil and gas firm Whitecap Resources.
The deal represents the company’s third agreement for assets sale in 2016.
Recently, Husky Energy agreed to sell 65% interest in its midstream assets in the Lloydminster region of Alberta and Saskatchewan for C$1.7bn ($1.3bn).
As per the deal, Husky will sell stakes in the assets, including approximately 1,900km of pipeline in the Lloydminster region, 4.1 million barrels of oil storage capacity at Hardisty and Lloydminster, and other ancillary assets, to Cheung Kong Infrastructure and Power Assets Holdings (PAH).
Husky Energy CEO Asim Ghosh said: "Today’s announcement is another step in the transition of our Western Canada portfolio into a more focused and efficient business."
"Over the past two months we have made significant progress on three major divestiture initiatives that will materially strengthen our balance sheet and further our transition into a low sustaining capital business."
The company expects the sale of the southwest Saskatchewan assets to deliver financial efficiencies.
These include reductions to ongoing sustaining and maintenance capital requirements, corporate operating costs, abandonment liabilities as well as administrative costs associated with the assets.
Husky said it will continue to sell several other packages in Western Canada.
Proceeds from the sales will be used by the firm to invest in higher-return projects in the portfolio while strengthening balance sheet.
The assets considered for sale currently produce approximately 11,600 barrels of oil equivalent per day. The transaction is subject to regulatory approval.
Image: Husky Energy’s Ansell liquids-rich gas production in Western Canada. Photo: courtesy of Husky Energy Inc.