Penn West Petroleum Ltd has announced that it has entered into a definitive agreement for the sale of its non-operated 9.5% working interest in the Weyburn Unit in Southeast Saskatchewan, Canada for cash consideration of $205 million, subject to closing adjustments customary in transactions of this nature.
The company intends to use the proceeds from this disposition to reduce its senior debt. Upon the completion of the sale of our Weyburn Unit working interest, the company will have raised approximately $810 million in total proceeds this year through its non-core asset disposition program.
David Dyck, Senior Vice President and Chief Financial Officer of Penn West, commented: "This disposition further demonstrates the continued success of our non-core asset disposition program. With this transaction, we have surpassed our $650 million non-core asset disposition target. We believe that our dispositions this year evidence the quality of our non-core asset base, our ongoing commitment to reduce our debt, and our ability to successfully execute meaningful transactions in a challenging commodity price environment. We will continue to pursue additional non-core asset divestitures in order to further reduce our leverage and we will continue to focus on our core operations."
The effective date of the sale was 1 July 2015 and closing is expected to occur during 1Q, subject to the receipt of all necessary regulatory approvals and the satisfaction of closing conditions customary in transactions of this nature. RBC Capital Markets acted as exclusive financial advisor on this disposition.
Edited from press release by Angharad Lock