Penn West Petroleum Ltd. (PWE) said Oct. 1 it has entered into an agreement to sell its interest in the Weyburn Unit in Southeast Saskatchewan to an undisclosed buyer for C$205 million (US$154.9 million) in cash.
The Calgary, Alberta company plans to use proceeds from the sale of its 9.5% nonoperated working interest in the unit to reduce its senior debt.
Upon completion of the sale, the company will have raised about C$810 million in total proceeds during 2015 through its noncore asset disposition program. This surpasses its C$650 million target, said David Dyck, senior vice president and CFO of Penn West.
The company will continue to pursue additional noncore asset divestitures in order to "further reduce our leverage and we will continue to focus on our core operations," Dyck said in a statement.
The company's capital budget for 2015 remains unchanged at C$500 million.
The effective date of the sale will be July 1, and closing is expected to occur during the fourth quarter. RBC Capital Markets was the company's exclusive financial adviser.
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