11/16/2012 11:20 EST | Updated 01/16/2013 05:12 EST

Oil producer Long Run Exploration announces asset sale, stock up 8%

CALGARY - Stock in Long Run Exploration Ltd. (TSX:LRE) gained almost nine per cent in heavy trading Friday, a day after the Prairie petroleum producer announced the sale of about $180 million in non-core assets.

On the Toronto Stock Exchange, Long Run closed up 37 cents, or 8.81 per cent, at $4.57 as nearly 3.4 million shares changed hands.

The producing assets being sold include the company's Viking interests in the Plat, Dodsland and Lucky Hills areas of Saskatchewan. They are currently producing about 1,900 barrels of oil equivalent per day — 1,800 barrels per day of crude oil and 600 thousand cubic feet per day of natural gas, based on field estimates.

Subject to regulatory approvals, the sale to the unnamed buyer is expected to close by mid-December, with the proceeds being used to reduce debt.

"As a result of this transaction, our anticipated year-end net debt will be approximately $290 million, including bank debt of approximately $240 million," the company said.

Following the sale, the company said it anticipate production will be about 23,000 boe per day weighted 48 per cent to crude oil and NGLs.

Meanwhile, the company said it had approved a 2013 capital budget calling for "robust exploration and development" of between $260 million and $270 million.

"Our capital plan will focus on the development of key oil resource plays in the Montney zone of the Peace River Arch and in the Viking zone of central Alberta," it said.