March 21, 2016 9:24 am
Updated: March 21, 2016 10:43 am

Penn West Petroleum withdraws from core area in northern Alberta

Penn West President and CEO David Roberts attends the company's annual general meeting in Calgary on May 13, 2015. Penn West Petroleum Ltd. is cutting its workforce by 400 full-time employees and contractors - most of them working at company headquarters in Calgary.

THE CANADIAN PRESS/Larry MacDougal
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CALGARY – Penn West Petroleum Ltd. says it has negotiated the sale of an additional $230 million of assets, including 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 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 have room to develop and grow through its Cardium play south of Slave Point and its Viking play on the Alberta-Saskatchewan border.

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It says the effective sale date for the Slave Point transaction will be Jan. 1 and the deal is expected to close during the second quarter of 2016. The sale of non-core assets is also to close during the second quarter.

Since the beginning of 2015, Penn West has completed or arranged $1 billion in cash asset sales.

“Although Slave Point has long been one of our core assets, given the current outlook for commodity prices, we had no development activity planned for at least the balance of this year,” Penn West chief financial officer David Dyck said Monday.

“While we believe that Slave Point offers upside, the extension of our Viking play and recent Cardium performance provide us with ample development and growth opportunities and the most attractive rates of return in our portfolio. We are confident that our over 1,400 sections of land between those two plays will give us significant running room going forward.”

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