• Assets could raise as much as C$750 million in sale: sources
  • Calgary-based producer refocusing on higher-margin projects

Canadian energy producer ARC Resources Ltd. is working with Royal Bank of Canada to sell a package of oil and natural gas properties that could fetch more than C$500 million ($380 million), according to people familiar with the matter.

The assets, in southeastern Saskatchewan, produced 7,777 barrels of oil equivalent per day in the three months ended June 30, according to the company’s website. The properties could fetch C$500 million to C$750 million, one of the people said.

The portfolio for sale includes ARC’s conventional oil production assets and its working interests in two fields, Weyburn and Midale, one of the people said.

Representatives for ARC and RBC declined to comment.

Calgary-based ARC has signaled plans to sell off several non-core properties as it focuses on projects with higher returns, particularly projects in the Montney Basin in Western Canada, said Jeremy McCrea, an analyst at Raymond James in Calgary.

ARC has a “pristine” balance sheet, unlike several oil and gas companies struggling amid protracted low oil prices, McCrea said in an interview. ARC has already started a sale process for several non-core assets amounting to roughly 3,800 barrels of oil equivalent per day, he said.

“They’re looking to consolidate their focus in key regions where they can get economies of scale and knowledge,” McCrea said.

ARC’s Redwater field in Alberta will also probably be for sale in the next two years, McCrea added.

ARC is stepping into an active landscape for deals, following sales in Saskatchewan by Penn West Petroleum Ltd., Rock Energy Inc. and Husky Energy Inc. this year.

Penn West agreed in June to sell its Dodsland Viking business in Saskatchewan to Teine Energy Ltd. for C$975 million, valuing the Penn West production at about C$71,000 per equivalent barrel of oil a day. If ARC receives bids at a similar price, its package would be worth at least C$550 million.

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