Journey Energy Divests Natural Gas and Power Assets in Alberta
TSX-listed Journey Energy Inc. has entered into separate definitive agreements with unnamed buyers to divest certain oil & gas assets in the Countess and Telfordville areas of Alberta, for total combined sales proceeds of approximately C$15.0 million, subject to closing adjustments.
The assets sold include Journey Energy’s newly commissioned 4.2 MW power project, along with associated producing assets in the Countess area, as well as a minor, non-core asset in the Telfordville area.
The company commissioned the power generation asset at the end of September this year, and approximately 750 Mcf/d of natural gas from the company’s Countess producing wells is currently being consumed by the generators.
In addition to the power project, the assets sold also include 455 gross (439 net) wells, and have associated asset retirement obligations of approximately C$30 million (uninflated and undiscounted).
The Countess area assets have proved (1P) reserves of approximately 24.6 billion cubic feet of gas equivalent (Bcfe), of which around 95% is gas, and proved + probable (2P) reserves of approximately 40.3 Bcfe, of which around 94% is gas. Average daily production from the assets is approximately 9.4 million cubic feet of gas equivalent per day (MMcfe/d).
“These asset sales and cost reduction initiatives, along with the recently announced restructuring of bank borrowings, represent another positive step forward for Journey, allowing the Company to reduce leverage and improve sustainability in these challenging times. Journey plans to remain diligent and steadfast in our resolve to provide all stakeholders with a brighter future through reducing our near term leverage and cost structure. We thank all of our stakeholders for their support and we look forward to updating you on our progress,” said Alex Verge, Journey Energy’s President & CEO.
Calgary-based Journey Energy is focused on conventional, oil-weighted operations in Western Canada, with current operations concentrated in two core areas in central and southern Alberta.
The transactions are not subject to any government approvals, and are expected to close on or before December 15th, 2020.