Pengrowth Gains Most in 23 Months on Asset Sale: Calgary Mover
The shares traded 6.3 percent higher at C$5.77 at 10:03 a.m. in Toronto after gaining 7.6 percent earlier, the most on an intraday basis since Aug. 9, 2011. The stock has advanced 17 percent this year.
Pengrowth yesterday said it has reached agreements to sell C$700 million ($673 million) of non-core assets that will be used to fund the first phase of the Lindbergh project. The asset sales will help reduce debt and expand production, said Dirk Lever, an analyst at AltaCorp Capital Inc. in Calgary.
“Concerns about Pengrowth’s debt levels should now be put to rest,” he said in a note to clients today. “With added financial flexibility, we are further confident in Pengrowth’s ability to execute the ramp up” of production at Lindbergh.
Lever raised his one-year target price for Pengrowth to C$10 a share from C$9, and maintained an outperform rating on the stock.
Pengrowth said it sold assets in southeast Saskatchewan to an unidentified oil producer and expects to close the deal by September. The company has C$1.42 billion worth of outstanding notes, according to data compiled by Bloomberg.
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