EOG divests majority of Canadian assets

EOG Resources Inc.

EOG Resources Inc. (NYSE: EOG) has divested all its Canadian assets in Manitoba and certain assets in Alberta in two separate transactions that closed on Nov. 28 and Dec. 1.

Proceeds from the divestitures were US$410 million, net of customary transaction adjustments. As a result of these transactions, US$150 million of restricted cash related to future abandonment liabilities was released. The proceeds and cash will be utilized for general corporate purposes.

Current forecast production from the divested assets is 7,050 barrels of crude oil per day, 580 barrels of natural gas liquids (NGLs) per day, and 43.5 million cubic feet of natural gas per day. Net proved reserves divested are estimated to be 7.7 million barrels of oil, 0.8 million barrels of NGLs, and 78.7 billion cubic feet of natural gas. EOG divested 1.3 million gross acres (1.1 million net), 97% of which were in Alberta. Of the approximate 5,800 producing wells sold, 5,255 were natural gas.

EOG has retained approximately 382,200 gross acres (282,100 net) in Alberta, British Columbia, and Saskatchewan. EOG will maintain an operations office in Alberta.

"This decision is consistent with EOG's focus on its outstanding US crude oil opportunities,” said EOG Chairman and CEO William R. Thomas. “We plan to reinvest some of the proceeds in these high-return assets, while retaining our position in the Horn River Basin and other exploration areas."  

Further details with respect to the counterparties and terms of the sale were not being disclosed. JP Morgan Securities LLC acted as financial advisor for EOG Resources Inc. on this transaction.

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