Provident Energy Trust has reached an agreement with a private company, Storm Ventures International Inc., to sell Provident's oil and natural gas assets in West Central Alberta for cash consideration of C$190 million, prior to normal closing adjustments. The divestiture of the West Central Alberta package is part of an asset rationalization initiative which also included the recent sale of the Trust's Lloydminster and Southern Saskatchewan properties.
This divestiture program has repositioned Provident's portfolio for growth by monetizing non-core properties and focusing financial and technical resources on those assets with significant growth potential. Provident's previously announced consolidated 2010 capital budget of C$142 million remains unchanged with approximately C$55 million directed towards our Upstream assets in the areas of Peace River Arch/Dixonville, Northwest Alberta and Southern Alberta.
"This transaction is another key step towards repositioning Provident as a sustainable growth vehicle and further enhances our financial flexibility moving forward," said Tom Buchanan, President and Chief Executive Officer. "Management and the Board of Directors wish to sincerely thank the Provident staff associated with these assets for their dedication and service to Provident."
The West Central Alberta operating area produces approximately 5,000 barrels of oil equivalent per day (boed), comprised of approximately 70 percent natural gas and 30 percent liquids. Total proved reserves were 10.5 million barrels of oil equivalent (mmboe) at September 30, 2009, while proved plus probable (P+P) reserves were approximately 14.6 mmboe. The sale reflects transaction metrics of $38,000 per flowing boed, $18.15 per boe of proved reserves and $13.02 per boe of P+P reserves. This transaction is expected to close in the first quarter of 2010, with an October 1, 2009 effective date. Proceeds from this asset disposition will be used to reduce outstanding debt under Provident's revolving term credit facility.
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