Canada-based oil and natural gas company NuVista Energy has signed an agreement to sell its non-core assets in W3/W4 operating areas for approximately $30.2m.
NuVista will receive $25.2m in cash and a $5m interest-bearing secondary charge debenture with a three-year term as part of the deal. The company plans to use the proceeds from the transaction to reduce outstanding bank debt and invest in the Wapiti Montney play.
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The divested assets include the Northwest Saskatchewan natural gas area and West Central Saskatchewan and Provost heavy oil areas in Canada.
According to the company, most of the divested assets are characterised by mature shallow dry gas and high watercut heavy oil production.
Current average production from the divested assets is around 1,800 barrels of oil equivalent a day (boe/d), which includes about 6.5 million cubic feet a day of natural gas and 715 boe/d of heavy oil.
The transaction provides NuVista with an exit from the W3/W4 area with the exception of around 1,000boe/d of heritage assets within the Oyen operating area.
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By GlobalDataIncluding the effect of the divestiture, the company expects production for the fourth quarter of 2013 to be within the guidance range of 17,000boe/d to 18,000boe/d.
Annual 2014 production after the effect of divestiture is expected to be around 17,500boe/d to 18,500boe/d, with fourth quarter 2014 production forecast to be in the range of 20,000boe/d to 21,000boe/d.
The transaction is expected to be completed in December.
