EOG Resources Inc., Houston, has divested all its Manitoba assets along with certain assets in Alberta in two separate deals that closed on Nov. 28 and Dec. 1., totaling $410 million.
The assets encompass 1.3 million gross acres, 1.1 million net, 97% of which are in Alberta. Of the 5,800 producing wells sold, 5,255 are natural gas.
Current forecast production from the assets is 7,050 b/d of oil, 580 b/d of natural gas liquids, and 43.5 MMcfd of natural gas. Net proved reserves divested are estimated at 7.7 million bbl of oil, 0.8 million bbl of NGLs, and 78.7 bcf of natural gas.
EOG has retained 382,200 gross acres, 282,100 net, in Alberta, British Columbia, and Saskatchewan. EOG will maintain an operations office in Alberta.
As a result of the deals, $150 million of restricted cash related to future abandonment liabilities was released.
"This decision is consistent with EOG's focus on its outstanding US crude oil opportunities,” said William R. Thomas, EOG chairman and chief executive officer. “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.”
EOG during 2010-11 undertook a large-scale divestment of its North American natural gas assets, shifting its focus to oil (OGJ Online, Aug. 9, 2010; Nov. 10, 2010; May 6, 2011).