Pengrowth Energy has entered into an agreement with an undisclosed buyer to sell its remaining portion of its Swan Hills oil assets in Canada for $185m.
According to Pengrowth, the divested assets had an average production of around 5,150 barrels of oil equivalent per day in the fourth quarter of last year.
Pengrowth stated: “The sale of the remaining Swan Hills assets is expected to impact full year 2017 average production guidance by approximately 3,400 boe per day, resulting in revised 2017 production to be between 43,500 and 45,500 boe per day.”
Pengrowth is expected to get additional financial flexibility from the sale proceeds which would help in further reducing its debt.
The company would raise a total of $707m after the sale of the remaining Swan Hills asset when clubbed with the $522m coming from the previous divestitures of Lindbergh GORR, Swan Hills and Bernadet assets.
While the effective sale date of the assets has been revealed to be January 1, 2017, the closing of the transaction is likely to be on May 31 depending on meeting all the required regulatory approvals and customary closing conditions.
After the completion of all the divestitures and using the proceeds for debt repayment, the overall debt of Pengrowth is expected to come down to CAD$700M ($515m). The repayment is expected to reduce Pengrowth's debt by around 60% compared to the levels recorded at the end of last year.
Earlier in the month, Pengrowth completed the sale of non-producing Montney lands at Bernadet in Canada for $92m.