PennWest CEO and president Dave Roberts. Image courtesy of BG Group.

Calgary-based midstream PennWest sold non-core assets in south central Alberta to an unnamed private company for $355 million Thursday.

The assets are currently producing approximately 7,500 barrels of oil equivalent per day, with natural gas and natural gas liquids accounting for 80 percent.

PennWest will receive about $47,000 per flowing barrel from the sale.

The deal will reduce the company’s well bore count by 2,250 gross wells and will have “a favorable impact” on its asset requirement obligation.

The non-core assets included in the sale were not allocated any current or future development capital under PennWest’s long term plan, the company said.

The transaction is expected to close in early December 2014.

Following the closing of the deal, PennWest will have sold $1 billion in assets during the first year of its long term debt reduction plan.

The sale will not affect the company’s 2014 production guidance.

PennWest continues to project 2014 production at between 101,000 to 106,000 barrels of oil equivalent per day, weighted about 66 percent to oil and liquids.

“We are now directing our disposition efforts to non-producing assets as we continue to increase the focus on our core areas and improve our financial flexibility through a considerably stronger balance sheet,” PennWest president and CEO Dave Roberts said.


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