Page 10 - NorthAmOil Week 23 2021

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