By OGJ editors
HOUSTON, Dec. 16 -- Vintage Petroleum Inc. sold its Ecuadorian business unit to Calgary-based EnCana Corp. for $141.7 million, the Tulsa-based independent said Monday. Based on the agreement, Vintage will sell its indirect wholly owned subsidiary, Vintage Oil Ecuador SA, in a deal that is slated to close Jan. 31, 2003.
The unit's properties had working capital of about $25.7 million as of June 30. At yearend 2001, Vintage said that the properties held proved reserves estimated to be 50.4 million bbl of oil.
Earlier this year, extensive production and pressure tests indicated that the first of two horizontal wells on the Oriente Block 17 in Ecuador appeared capable of producing oil at rates in excess of 10,000 b/d from Cretaceous Lower Napo U, operator Vintage reported (OGJ, Oct. 21, 2002, p. 51).
Vintage said that it parted with the assets in an effort to reduce its debt by $200 million. At yearend 2001, Vintage carried long-term debt of just more than $1 billion. For yearend 2002, the company estimates it will reduce its debt to $811 million.
The number of independents selling their Ecuadorian assets has doubled. Earlier this year, Kerr-McGee Corp., through its subsidiaries Kerr-McGee Ecuador Energy Corp. and KM Global Ltd., completed the sale of all Ecuadorian assets to Perenco Ecuador Ltd., a unit of privately held French E&P firm Perenco SA, and another, unidentified firm, for $88 million (OGJ Online, Sept. 17, 2002).
Vintage plans to sell additional US assets in 2003 as well as other assets deemed to be noncore to the company, Robert Phaneuf, vice-president, corporate development, told OGJ.
