Suncor Energy Inc. pared yet another chunk of natural gas production from its portfolio Thursday, announcing it would sell Alberta land to a subsidiary of British energy giant Centrica PLC for $375-million.
The sale of the Wildcat Hills property, northwest of Calgary, brings Suncor's total divestiture tally to $2.8-billion since its union with Petro-Canada just over a year ago.
Direct Energy, the Centrica subsidiary, is one of North America's biggest power suppliers, and has been looking to use more of its own gas production to fuel its operations.
"Growing our upstream gas and power assets is important to ensuring we are a stable, long-term partner to the millions of residential and business customers we serve across North America," said Chris Weston, president and chief executive officer of Direct Energy.
After Thursday's acquisition, about 35 per cent of the load required by Direct Energy's North American natural gas customers is covered.
The Wildcat Hills assets produce 80 million cubic feet per day of natural gas, and hold 240 billion cubic feet equivalent of natural gas reserves.
"The existing low commodity price cycle in North American energy markets presents significant growth opportunities for our business. We will continue to seek out both natural gas and power assets that present good value, which is consistent with our strategy for greater integration," said Badar Khan, president of Direct Energy's upstream and trading business.
Suncor says the sale is expected to close during the fourth quarter, and is subject to regulatory approvals typical of transactions of this nature.
Since the Petro-Canada deal, Suncor has been shedding assets that don't fit with its oil sands focus.
Sales to date include all oil and gas producing assets in the United States Rockies and some non-core natural gas properties in Western Canada. The company has also sold all shares in Petro-Canada Netherlands BV and all Trinidad and Tobago assets.
Remaining proposed divestments include certain natural gas assets in Western Canada and non-core North Sea assets.
Including the latest sale to Direct Energy, Suncor has disposed of, or reached agreements to dispose of, assets worth approximately $2.8-billion. It had set a target of between $2-billion and $4-billion.