ALBERTA

Pengrowth sells $700 million in assets, Lindbergh oilsands project moves ahead

07/16/2013 04:10 EDT | Updated 09/15/2013 05:12 EDT
CALGARY - Pengrowth Energy Corp. says it has the funding it needs to go ahead with the first phase of its Lindbergh oilsands project east of Edmonton after selling more than $700 million in non-core assets.

The divestiture program, announced in January, will see Pengrowth (TSX:PGF) sell properties in southeast Saskatchewan to a small Canadian oil and gas company for $510 million.

On top of that, Pengrowth has sold, or has deals to sell, another $203 million in assets, representing 5,900 barrels per day of production.

Factoring in another $316 million from a Saskatchewan divestiture announced in March, Pengrowth has raked in more than $1 billion in proceeds in 2013.

"As we have outlined throughout the year, our focus in 2013 has been to demonstrate that we have the funds in hand to develop the first commercial phase of the Lindbergh project," said Pengrowth CEO Derek Evans.

"We are very pleased with the results of our disposition program, particularly given the competitiveness of the current asset disposition market."

The first phase of the 12,500-barrel-per-day Lindbergh development received regulatory approval on Monday.

Though Pengrowth didn't name the buyer for the southeast Saskatchewan assets, it appears to be Calgary-based junior TORC Oil & Gas Ltd. (TSX:TOG).

Just as Pengrowth made its announcement, TORC disclosed plans to buy assets in southeast Saskatchewan for $510 million from an "independent intermediate oil and gas company." Both companies say the properties produce 5,700 barrels of oil per day.

Pengrowth shares rose two per cent to $5.45 on the Toronto Stock Exchange Tuesday. TORC's rose 1.2 per cent to close at $1.72.

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