Teine Energy Ltd. has agreed to purchase all of the oil-producing assets of its fellow Calgary-based firm Penn West Petroleum Ltd for $975m, according to Calgary Herald.
The deal, which is expected to close in the second quarter of 2016, involves acquiring all of Penn West’s properties in Saskatchewan, including its Dodsland Viking light-oil assets in the east and the medium and heavy crude assets in the west, reported Oil & Gas Journal.
Penn West President and CEO, Dave Roberts, was quoted by Oil & Gas Journal saying: “While the Dodsland Viking was an important contributor to Penn West’s growth profile in recent years, this transaction will allow us to replace these largely mature assets by funding the more prospective and numerous growth opportunities in our Cardium and Alberta Viking positions—areas where we are more focused and more competitive,”
Penn West has 700 net sections and 1,500 drilling locations in the Cardium area. In the first quarter, the company produced 19,500 boe/d. The firm believes that the deal gives it financial flexibility to begin exploiting the area’s multihorizon potential.
Further, Penn West has also agreed to sell Alberta properties for about $140m, the company said, without identifying any buyers. In total, Penn West has agreed to sell assets of $1.3b in cash in 2016.