NuVista Energy Sells Non-Core Assets For $30.2 Million

Bought non-core assets in the NW Saskatchewan natural gas and W Central Saskatchewan and Provost heavy oil areas.

NuVista Energy Ltd. (TO: NVA) announced Dec. 11 the disposition of non-core assets in its operating areas to a private company for $30.2 million.

The disposed assets include the Northwest Saskatchewan natural gas area and the West Central Saskatchewan and Provost heavy oil areas. The majority of these assets are characterized by mature shallow dry gas and high watercut heavy oil production. Current production from these assets averages 1,800 barrels of oil equivalent per day (BOE/d), comprised of 6.5 million cubic feet per day (MMcf/d) of natural gas and 715 BOE/d of heavy oil.

This transaction continues to sharpen Calgary-based company's focus on its condensate-rich Wapiti Montney play. The divestiture, coupled with year-to-date disposition proceeds of $13.2 million, brings NuVista well within its previously stated annual target range for non-core dispositions of $25 million to $50 million.

The gross proceeds of $30.2 million consist of $25.2 million in cash and a $5 million interest bearing secondary charge debenture with a three year term. The disposition has an effective date of Sept. 1, an expected closing date of Dec. 18.

The net proceeds from this transaction will initially be used to reduce outstanding bank debt, then ultimately re-deployed into profitable investment in the Wapiti Montney play.

This transaction provides NuVista an exit from the W3/W4 area with the exception of 1,000 BOE/d of heritage assets within the Oyen operating area. These dispositions move NuVista one step further along the ongoing process of significantly sharpening the focus of the company as a condensate-rich Montney resource growth engine.