04/27/2015 09:39 EDT | Updated 07/29/2015 10:59 EDT

Surge says $430-million asset sale will reduce debt, help invest in discovery

CALGARY - Surge Energy Inc. (TSX:SGY) is selling some of its oil-producing assets in Saskatchewan and Manitoba for $430 million to an unidentified Canadian company.

Calgary-based Surge said the sale will allow it to reduce its indebtedness and prepare it to redeploy capital to the Upper Shaunavon oil discovery in southwestern Saskatchewan.

The assets for sale currently produce the equivalent of about 4,750 barrels of oil per day. They have 12.6 million barrels of proved reserves while proved plus plus probable reserves total 23 million barrels.

Surge said it plans to maintain its current dividend of 30 cents per share annually, paid monthly. The shareholder payout was reduced starting with monthly dividend for January, which dropped to 2.5 cents per share from five cents per share..

The company's stock was uo 39 cents or 10.4 per cent at $4.14 in midmorning trade on the Toronto Stock Exchange.