CALGARY- Suncor Energy Inc. is selling the bulk of its Western Canadian natural gas business to a British-Qatari partnership for $1 billion, but will hang on to its undeveloped shale lands in the Montney region of B.C. for now.
The deal with Britain’s Centrica PLC and Qatar Petroleum International includes conventional properties throughout Alberta, northeastern British Columbia and southern Saskatchewan.
The sale shows Suncor’s “commitment to capital discipline,” CEO Steve Williams said in a release Monday.
“We will continuously review and refine our portfolio of assets to ensure we are investing in projects that deliver profitable growth and strong returns for our shareholders.”
The transaction is subject to regulatory approval- including the Competition Bureau and Investment Canada- and is expected to close in the third quarter of 2013.
Production from the business is estimated to be about 42,000 barrels of oil equivalent per day this year. Suncor will adjust its guidance accordingly once the deal closes.
Suncor spokeswoman Sneh Seetal said the company will direct the proceeds of the sale toward three priorities: investing in its base business, pursuing profitable growth projects and returning cash to shareholders through dividends or share buybacks.
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Suncor has sold billions in assets in Canada, the U.S. and around the world since it merged with Petro-Canada in 2009, as it focuses most of its attention on its core oilsands business.
Last month, Suncor said it was cancelling its troubled Voyageur oilsands upgrader because market conditions rendered it economically challenged. The company took a $1.5-billion writedown on Voyageur during the fourth quarter of 2012.
he sale announced Monday excludes Suncor’s undeveloped shale gas properties in the Montney region of northeastern B.C. and unconventional oil assets in Wilson Creek, Alta.
Suncor shares were down about 3.5 per cent around mid-day Monday at $27.82. The decrease came on a day that oil prices dropped to their lowest level since mid-December to near US$89 per barrel.
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