Penn West sold a minority working interest in its Weyburn Unit in Southeast Saskatchewan to an unnamed party on Thursday for $205 million in cash.
The Alberta-based company said it sold a non-operated 9.5 percent stake in the unit and intends to use the proceeds to reduce its senior debt.
Upon the completion of the Weyburn Unit sale, Penn West will have raised $810 million in total proceeds this year through its non-core asset disposition program.
The working interest in the Weyburn Unit accounted for an average 2,500 barrels of oil per day at an operating cost of $11.50 per barrel.
The effective date of the sale will be July 1, 2015 and closing is expected to occur during the fourth quarter.
RBC Capital Markets acted as Penn West’s exclusive financial adviser for the sale.
As a result of the divestiture of both its Weyburn Unit working interest and its Mitsue properties, Penn West updated its annual production guidance range to 84,000 to 88,000 barrels of oil equivalent per day, down slightly from its previous guidance of 86,000 – 90,000 boe/d.
The company’s capital budget for the year remains unchanged at $500 million.
Penn West continues to expect its operating costs for the year to be between $19.25/boe and $19.75/boe with general and administrative expenses for the year projected to be between $2.80/boe and $3.05/boe.