Pearl Exploration and Production Ltd. reports that it has entered into a binding agreement with a large integrated energy company to sell certain non-core heavy oil producing assets for $75 million.
These assets, principally located in the Lloydminster, Celtic, Pikes Peak and Thunderchild areas of Saskatchewan, currently produce approximately 3,200 Boe/d and are part of the non-core asset package that the Company had announced its intentions to investigate selling on January 8, 2008.
“We are very pleased with the outcome of this non-core asset rationalization effort. While these assets make up approximately 30% of our current production and cash flow they are only 10% of our proved plus probable reserves and 3% of our proved plus probable plus possible reserves. By disposing of these assets we will be better able to concentrate on our larger resource to reserve conversion opportunities both in terms of capital and in terms of human resources. In addition this sale will allow Pearl to eliminate its current debt balance of approximately $30 mm, stated Keith Hill, President and CEO of Pearl.
The sale is expected to close prior to the end of May. Canaccord Enermarket acted as exclusive financial advisor to Pearl in this disposition.