Page 10 - NorthAmOil Week 23 2021
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NorthAmOil                                    INVESTMENT                                          NorthAmOil


       Enbridge to sell Noverco stake for $943mn





        EASTERN          CANADA’S Enbridge announced on June 7  sector-leading financial strength and flexibility
        CANADA           that one of its subsidiaries had struck a deal to  and demonstrates our disciplined approach to
                         sell its 38.9% non-operating interest in Noverco,  capital allocation,” he added.
                         a Montreal-based natural gas distributor, to   Enbridge said earlier this year that it was aim-
                         majority owner Trencap.              ing to keep debt levels at 4.5-5.0 times earnings
                           Enbridge is selling the stake for CAD1.14bn  before interest, taxes, depreciation and amorti-
                         ($943mn) in cash. The transaction is anticipated  sation (EBITDA) while raising its dividend this
                         to close by early 2022. Enbridge will initially use  year.
                         proceeds from the sale to repay short-term debt.   Following the disposal of the Noverco stake,
                         It stated that “on this conservative basis the trans-  Enbridge will continue to supply gas to about
                         action is expected to be neutral to distributable  43,500 residential, commercial, institutional
                         cash flow per share”.                and industrial customers in Quebec through its
                           Trencap, which already owns the remain-  Gazifere subsidiary.
                         ing 61.1% stake in Noverco, is a consortium   The company also continues to own Ontar-
                         led by Caisse de dépôt et placement du Québec  io-based franchises that make it the largest gas
                         (CDPQ). Noverco, in turn, indirectly owns Éner-  distribution network in Canada, with more than
                         gir – a Quebec-based business with interests pri-  3mn customers. Indeed, two days after announc-
                         marily in gas distribution and power distribution  ing the sale of the Noverco stake, the company
                         in Quebec and Vermont.               said it was expanding natural gas access to
                           “We’re pleased to opportunistically mone-  rural, northern and indigenous communities
                         tise this non-strategic financial investment in  in Ontario in collaboration with the provincial
                         Noverco at an attractive valuation and surface  government. The company said it would access
                         this value for our shareholders,” stated Enbridge’s  Ontario’s Natural Gas Expansion Program to
                         chief financial officer, Colin Gruending. “This  support 27 projects to increase gas access across
                         transaction further enhances our already  the province.™





       Occidental agrees to sell non-core



       Permian assets for $508mn





        PERMIAN BASIN    OCCIDENTAL Petroleum announced this  pulled the oil and gas industry into another
                         week that it has agreed to sell certain non-stra-  downturn.
                         tegic assets in the Permian Basin to an affiliate   Occidental has responded to market condi-
                         of Colgate Energy Partners III for $508mn. Pro-  tions by cutting jobs and oil production, as well
                         ceeds from the sale will go toward debt reduc-  as by selling assets. As of March 31, its long-term
                         tion, the company said in a June 10 statement.  net debt stood at $35.47bn, according to a regu-
                           The assets consist of roughly 25,000 net acres  latory filing.
                         (101 square km) in the Permian’s Southern Del-  The company expects the Colgate deal to
                         aware sub-basin in Texas with production of  close by the third quarter of this year, and said it
                         around 10,000 barrels of oil equivalent per day  was maintaining its forecast for capital expendi-
                         (boepd) from about 360 active wells.  ture and production over the whole of 2021.
                           “We continue to advance our divestiture and   The sale comes as stronger oil prices make
                         deleveraging goals while delivering value for  it easier for producers to dispose of non-core
                         our shareholders,” stated Occidental’s president  assets at more favourable prices. According to
                         and chief executive officer, Vicki Hollub. “This  data analytics firm Enverus, sales of land parcels
                         transaction brings our post-Colombia divesti-  worth $6.9bn have been announced across the
                         ture total to over $1.3bn of the planned $2-3bn,  US the first five months of 2021, with the figure
                         and since August 2019 we have divested more  closing in on the $7bn worth of sales recorded
                         than $9bn of assets.”                over the whole of 2020. And Reuters cited com-
                           The push to sell assets has been underway  ments from more than a dozen investment
                         since the company took on significant debt to  bankers and industry sources this week as being
                         acquire Anadarko Petroleum for $38bn in 2019.  behind its estimate that US acreage worth more
                         The move proved ill-timed, coming just months  than $12bn was either up for sale already or
                         before the coronavirus (COVID-19) pandemic  being prepared for sale.™



       P10                                      www. NEWSBASE .com                           Week 23   10•June•2021
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