CALGARY – Paramount Resources Ltd. (“Paramount” or the “Company”) is pleased to announce that it has closed the sale of certain natural gas weighted properties in West Central Alberta (the “Assets”) for cash consideration of approximately $55 million (the “Transaction”).
Paramount will retain all of its Duvernay assets in both Willesden Green and the East Shale Basin, as well as its fee title and royalty lands (the “Retained Lands”).
The Transaction significantly reduces the complexity of Paramount’s operations, as the Company has disposed of ~320,000 net acres and associated wells and facilities south of township 53 in Alberta (excluding the Retained Lands). Other key attributes of the Assets include:
- Average sales volumes of ~8,500 Boe/d (60% natural gas) in the third quarter of 2019.
- Netback of ~$1.8MM or ~$2.30/Boe in the third quarter of 2019.
- December 31, 2018 Total Proved reserves of 15.9 MMBoe (60% natural gas) and Total Proved plus Probable reserves of 20.1 MMBoe (60% natural gas).
The Company had minimal capital spending planned for the Assets in the near term. The sale of the Assets will impact Paramount’s fourth quarter average production by approximately 2,500 Boe/d, resulting in anticipated fourth quarter average production of between 84,500 Boe/d and 87,500 Boe/d.
The sale of the Assets is consistent with Paramount’s strategy of pursuing non-core dispositions to rationalize its portfolio as the Company continues to focus on the development of its core liquids-rich Montney assets at Karr and Wapiti.
Cash proceeds from the Transaction will initially be used to reduce amounts drawn on the Company’s $1.5 billion bank credit facility that matures in November 2022. Approximately $720 million was drawn on the facility as of September 30, 2019.
Peters & Co. Ltd. and National Bank Financial Inc. jointly acted as financial advisors to Paramount on the Transaction.
Paramount is an independent, publicly traded, liquids-focused Canadian energy company that explores for and develops both conventional and unconventional petroleum and natural gas resources. The Company also pursues long-term strategic exploration and pre-development plays and holds a portfolio of investments in other entities. The Company’s principal properties are located in Alberta and British Columbia. Paramount’s Class A common shares are listed on the Toronto Stock Exchange under the symbol “POU”.