Oil and gas producer Calgary-based Fairborne Energy Ltd. says it is selling dry natural gas assets for a total of $189 million.
The disposition assets include the company’s greater Marlboro area (Marlboro, McLeod and Westerose) and the company’s shallow gas/coal bed methane assets in the Clive area, which together represent current daily production of approximately 8,700 barrels of oil equivalent per day (95 per cent natural gas), 23.1 mmboe of proved reserves and 32.8 mmboe of proved plus probable reserves (93 per cent natural gas).
The deals are expected to close Oct. 1.
The company says that proceeds will be used to pay down its some $185 million of net debt.
“Going forward Fairborne will focus on the delineation and exploitation of its large land base in the greater Harlech area where the company has 312 gross (201 net) sections of land in the heart of the liquids rich deep basin fairway,” Fairborne Energy said in an August 28, 2012 statement to media.
Fairborne said that depressed natural gas prices and volatility in capital markets have challenged its ability to fund growth.
The company launched in March a process to weigh its strategic options, which could result in the sale of the company, among other things, with an eye to boosting shareholder value.