CALGARY — Penn West Petroleum Ltd. says it has negotiated the sale of the additional $230 million of assets, together with a formerly core property in the Slave Point area of northern Alberta.
The Slave Point transaction is worth $148 million. The sale of non-core assets will prove to add a further $80 million in cash.
Penn West says the sale of Slave Point will reduce its overall operating costs.
It also expects to possess room to develop and grow through its Cardium play south of Slave Point and it is Viking experience the Alberta-Saskatchewan border.
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It says the effective sale date for that Slave Point transaction will be Jan. 1 and the deal is anticipated to shut throughout the second quarter of 2016. The sale of non-core assets can also be to shut throughout the second quarter.
Since the start of 2015, Penn West has completed or arranged $1 billion in cash asset sales.
“Although Slave Point is definitely one of our core assets, because of the current outlook for commodity prices, we had no development activity planned for at least the total amount of this year,” Penn West chief financial officer David Dyck said Monday.
“In the end believe that Slave Point offers upside, the extension of our Viking play and recent Cardium performance give to us ample development and growth opportunities and the most engaging rates of return in our portfolio. We’re confident that our over 1,400 sections of land between those two plays can give us significant running room moving forward.”
The Canadian Press
