Repsol is selling exploration and production assets in Canada for $468 million

Repsol It agreed to sell its oil and gas assets in Canada to… Beto For $468 million (about 433 million euros), with the aim of focusing its activity on areas considered essential, according to what company sources reported in a press release. The agreement includes all mining rights, facilities and infrastructure related to Repsol’s oil and gas exploration and production business in Canada, including the Greater Edson area assets, which have a net production of 23 thousand barrels of oil equivalent per day, most of which is gas.

The company’s portfolio has been rationalized through a series of divestments in non-strategic locations, reducing Repsol’s exploration and production presence from 25 to 14 countries following the sale of assets in Vietnam, Malaysia, Papa New Guinea, Australia, Greece, Morocco, Iraq, Bulgaria, Ecuador and Russia. Developments focus New investments in key areas such as the United States and Brazil, in addition to implementing selective acquisitions in unconventional assets and in US waters.

Repsol noted that by leveraging the results of the company’s recognized exploration experience, which has allowed the company to make some of the world’s most important hydrocarbon discoveries in the past decade, the exploration portfolio has generated many opportunities that are now being developed. Since 2020, Repsol has made fourteen discoveries that have added significant resources, particularly in the United States and Mexico, the development of which will help maintain current production levels until the end of the decade.

In line with the Strategic Plan 2021-2025, Repsol seeks to transform its exploration and production business into a leader in reducing CO2 emissions in the sector, with the goal of reducing carbon intensity by 75% by 2025, starting from a 2016 baseline. This will be achieved By focusing on assets with the lowest emissions per barrel, while maximizing and improving efficiency and innovating processes using cutting-edge technology and digital tools, in addition to developing associated projects to capture and store carbon dioxide.₂Sources from the Spanish company explained.

The value of Repsol’s existing asset portfolio and the long-term strategy of its exploration and production business became evident through the partnership with EIG, which acquired a 25% stake for $4.8 billion, valuing the unit at $19 billion and beating analyst consensus. For Repsol, this agreement has made it possible to advance the company’s goal of achieving net-zero emissions through a project that accelerates the transition and strengthens its multi-energy profile, while reducing leverage and debt and maintaining strong cash flow to finance ambitious growth and attract shareholders. compensation.

For his part, Jean-Paul Lachance, President and CEO of Peyto, commented on the acquisition: “This acquisition represents a very important milestone for Peyto. We have wanted these lands for many years and this asset meets all our requirements. Peyto has a history of being very selective when it comes to With acquisitions, but also has had great success in creating value from them. Repsol’s assets fit perfectly into the “Peyto Deep Basin acreage” area and offer a large number of prime undeveloped locations that will immediately compete for capital within our portfolio. In addition, we have identified several Opportunities to leverage our low-cost operating expertise in these assets, which we expect will result in significant annual cost savings. Together, “at current prices and under our development plan, the combined assets are and are expected to generate sufficient accretive free cash flow over the next three years.” To support long-term sustainable returns to shareholders in the form of debt reduction and earnings growth.

Likewise, Repsol maintains commercial and logistics operations in Canada through its St. John’s LNG facility and trading business. The Company expects the acquisition to close in mid-October, subject to customary closing conditions, including receipt of necessary regulatory approvals. RBC Capital Markets acted as financial advisor to Repsol in this process.