IN THE NEWS / Gulf Canada Resources President Said Company Not Holding
Asset Garage Sale
CAROL HARRINGTON
Calgary Herald
Gulf Canada Resources will continue to sell assets to cut its debt but not at basement bargain prices, company president Richard Auchinleck said Wednesday. Dozens of petroleum companies have contacted Gulf because they heard the company is in financial dire straits and is desperate to sell assets, said Auchinleck.
"We have some people saying we are going to have a fire sale in terms of assets," Auchinleck told reporters.
"Clearly, it's going to be a high-priced garage sale.
"We expect to get good value for these assets."
Burdened by a $2.8-billion debt, Gulf announced earlier this year it would unload non-core holdings and chop the debt to $1.85 billion.
Gulf is close to reaching that goal and has plans to whittle more by selling more assets.
"We are going to take the next step in terms of debt reduction," Auchinleck said, adding he's aiming to bring the debt below $1.5 billion in the next 12 to 18 months.
Gulf will close a $220-million deal in the next two weeks by selling midstream assets in Alberta, Auchinleck said. The deal will take Gulf over the $1-billion mark in its asset-selling binge since the beginning of this year.
Gulf made some major acquisitions, totalling $1.6 billion, during J.P. Bryan's three-year term as company president.
Bryan went on a shopping spree and turned the company from a money loser into a profitable oil and gas producer before resigning last February.
Gulf now wants to sell some heavy oil assets in Alberta, and there's interest in its offshore property in Australia, Auchinleck said.
But it has no intention of selling its nine-per-cent share of Syncrude.
"For us, it's very much sacred," Auchinleck said. "We've had a lot of approaches on Syncrude and we've sent them all away."
Syncrude, a joint-venture oilsands plant in northern Alberta, rolled out its billionth barrel this spring and had revenues exceed $2 billion for the second consecutive year.
During the second quarter, Gulf's oil and gas liquids production increased 10 per cent to 124,000 barrels a day.
The company's stocks plunged during the past year - from a high of $13.25 to $4.29. Auchinleck pointed out that stocks have rebounded in the past two weeks, closing above the $6 mark.
Auchinleck was in Calgary Wednesday for a two-day international oil and gas market conference held by the Canadian Energy Research Institute. |
