​Pengrowth selling $180 million in Swan Hills light oil as SAGD focus continues

Pengrowth Energy CEO Derek Evans. Image: Pengrowth Energy

Pengrowth Energy is carving off a piece of its Swan Hills light oil production to divest in order to reduce debt.

The company says it will receive $180 million in cash for the assets, which produced about 4,920 boe/d in the fourth quarter of 2016, weighted approximately 82 percent to liquids.

Pengrowth says it controls “large light oil accumulations in the Swan Hills area of northern Alberta with low production decline rates and strong cash flow,” but does not break out production by region in its financial statements.

Total Pengrowth light oil production was 10,597 boe/d in the fourth quarter of 2016.

The company says the transaction will allow it to pay off US$100 million in debt, reducing net debt to C$970 million.

Pengrowth's main focus is on its Lindbergh SAGD project in the Cold Lake region, where it will spend $12.1 million in development capital in 2017 compared to $1.4 million on its conventional assets.