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Paramount closes C$340M sale of Alberta assets to private producer

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Paramount closes C$340M sale of Alberta assets to private producer

Paramount Resources Ltd. closed its divestiture of oil and gas properties in the Kakwa region of Alberta to Strath Resources Ltd. for a total of C$340 million.

The assets in Resthaven/Jayar in the Montney Shale is expected to produce about 5,000 barrels of oil equivalent per day in the second half of 2018, with 36% liquids, according to a July 6 news release. The total consideration includes C$170 million in cash, 85 million Strath common shares and 10-year warrants to buy an additional 8.5 million Strath shares.

The equity portion of the consideration gives Paramount a 16% equity interest in Strath. Paramount's President and CEO Jim Riddell also joined Strath's board of directors. Paramount plans to use the cash proceeds to pay down debt under its credit facility.

Paramount's exploration and production operations are focused in Alberta and British Columbia, while the private producer Strath has a liquids-rich position in the Montney Shale.