Perpetual Energy Announces Disposition of Warwick Gas Storage
Perpetual Energy (TSX:PMT) has announced the signing of a definitive agreement to sell its 30 percent partnership interest in Warwick Gas Storage for $20 million. The transaction includes the disposition of Perpetual’s share of Warick’s approximately $8.3 million of debt net of working capital. As quoted in the press release: Perpetual will receive a net …
Perpetual Energy (TSX:PMT) has announced the signing of a definitive agreement to sell its 30 percent partnership interest in Warwick Gas Storage for $20 million. The transaction includes the disposition of Perpetual’s share of Warick’s approximately $8.3 million of debt net of working capital.
As quoted in the press release:
Perpetual will receive a net dividend of $0.5 million at closing, for effective total value of approximately $23 million. The transaction includes the gas storage reservoir and facility as well as 9,207 net acres of surrounding lands and associated wells and infrastructure with current net production of 470 Mcf/d (the “Buffer Land Assets”, collectively with WGS LP, the ‘Disposed Assets’). Closing is expected to occur on or around May 25, 2016 and is subject to customary closing conditions.
Based on the Company’s third party engineering report prepared by McDaniel and Associates Consultants Ltd. (“McDaniel”), as at December 31, 2015, the Buffer Land Assets include 316 Mboe of recognized proved and probable natural gas reserves valued at $37 thousand.
Estimated 2016 funds flow from the Disposed Assets is forecast to be $2.9 million, virtually all of which is attributable to funds flow from the gas storage business in WGS LP and previously expected to reduce Perpetual’s share of debt within the partnership. As such Perpetual does not anticipate 2016 funds flow to be impacted by the disposition.
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