The Assets include approximately 114 gross (101 net) sections of land, with 7.2 MMBoe of proved developed producing reserves, 40.2 MMBoe of proved reserves and 63.9 MMBoe of proved plus probable reserves based on the Company’s December 31, 2021 reserves report.(1) The Assets also include the Smoky 6-16 gas plant and other infrastructure related to the Assets. Sales volumes from the Assets were approximately 4,700 Boe/d (13 MMcf/d of shale gas and 2,500 Bbl/d of NGLs) in the third quarter of 2022. Paramount’s current five-year outlook for the period from 2023 to the end of 2027 incorporates average sales volumes of approximately 5,000 Boe/d from the Assets.
The Disposition crystalizes the value of the Assets at attractive metrics while maintaining significant long-life production and development potential in the Kaybob Region, including at the Company’s Kaybob North Duvernay property.
Closing of the Disposition is expected to occur in January 2023, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.
On closing, Paramount expects to:
- use a portion of the cash proceeds from the Disposition to repay any then remaining drawings under its revolving credit facility;
- declare a special dividend of $1.00 per class A common share; and
- update its 2023 guidance, preliminary 2024 guidance and five-year outlook.
Sales volumes in October averaged approximately 104,000 Boe/d (45% liquids).(1) Grande Prairie Region production in November and early December was adversely impacted by unplanned outages and curtailments at the third-party Wapiti natural gas processing plant and unexpected infrastructure downtime at Karr. Unplanned constraints on firm receipt service on the Nova Gas Transmission Line in late October also impacted production. Although Grande Prairie Region production has largely been restored, these impacts are expected to result in average fourth quarter sales volumes being reduced by approximately 6,000 Boe/d. Accordingly, fourth quarter 2022 sales volumes are now expected to average between 97,000 Boe/d and 101,000 Boe/d (45% liquids) versus previous guidance of between 103,000 Boe/d and 107,000 Boe/d (45% liquids). Full year 2022 average sales volumes are now expected to average between 88,000 Boe/d and 90,000 Boe/d (45% liquids) versus previous guidance of between 90,000 Boe/d and 91,000 Boe/d (45% liquids).
Paramount is an independent, publicly traded, liquids-focused Canadian energy company that explores for and develops both conventional and unconventional petroleum and natural gas, including longer-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”.