On December 5, 2019, Paramount Resources announced the closing of a sale of natural gas weighted properties in West Central Alberta for approximately CAD 55 million in cash. Paramount will retain all of its Duvernay assets in both Willesden Green and the East Shale Basin, as well as its fee title and royalty lands.
The transaction reduces the complexity of Paramount's operations, as the company has disposed of ~320,000 net acres and associated wells and facilities south of township 53 in Alberta excluding the retained lands. Other key attributes of the assets include:
- Average sales volumes of ~8,500 Boe/d (60% gas) in 3Q 2019
- Netback of ~$1.8MM or ~$2.30/Boe in 3Q 2019
- December 31, 2018 Total Proved reserves of 15.9 MMBoe (60% gas) and Total Proved plus Probable reserves of 20.1 MMBoe (60% gas)
The sale of the assets is consistent with Paramount's strategy of pursuing non-core dispositions to rationalize its portfolio as the company continues to focus on the development of its core liquids-rich Montney assets at Karr and Wapiti. Cash proceeds from the transaction will initially be used to reduce amounts drawn on the company's CAD 1.5 billion bank credit facility that matures in November 2022. Approximately CAD 720 million was drawn on the facility as of September 30, 2019. Peters & Co. and National Bank Financial jointly acted as financial advisors to Paramount.