Birchcliff Energy (BIR-T) a sizable investment of the billionaire Seymour Schulich (who owns 40 million of its 265 million shares), lost 12 cents to $5.81 on 1.79 million shares. It has arranged a series of asset sales for total proceeds $142-million. The most notable sale is that of the Worsley Charlie Lake light oil pool, for which Birchcliff will receive $100-million. Investors did not seem impressed with this price tag. The sale itself comes as no surprise, given that Birchcliff announced in March that it would start marketing all of its Charlie Lake assets and their associated production of about 3,800 barrels of oil equivalent a day. Analysts pegged the value of the assets at the time at $200-million to $300-million. The Worsley property contributes over four-fifths of the total Charlie Lake production, so a sale price of $100-million is a good deal lower than investors might have hoped. Birchcliff was evidently keen to close a quick sale so it could tidy up its balance sheet and tighten its focus on its core Montney assets. It has been almost exactly a year since Birchcliff vastly expanded its Montney position by buying EnCana Corp.'s (ECA: $12.33) Gordondale properties for $625-million. The sale closed on July 28, 2016, and instantly boosted Birchcliff's production to around 65,000 barrels of oil equivalent a day from closer to 40,000. Birchcliff is planning another big production boost in the fourth quarter of this year. That will not be the result of an acquisition, but rather a planned expansion of its Pouce Coupe gas plant. This expansion is expected to enable fourth quarter production of 80,000 to 82,000 barrels a day. Birchcliff previously said that it expected to start commissioning the expansion in July. Whether it did so was not mentioned in its latest update, but it may have more to say on Aug. 10, when it plans to release its second quarter financials and update its full-year guidance to reflect the new asset sales.
The above-mentioned Mr. Schulich has another sizable oil and gas investment in Pengrowth Energy Corp. (PGF-T), Pengrowth has 552 million shares outstanding and Mr. Schulich owns 109 million of them. He first disclosed himself as a major shareholder in March, 2016. The stock was worth around $1.40 at the time, and although his presence no doubt helped the stock rise to as much as $2.70 in May, 2016, it has since plunged to nearly 90 cents. One of the concerns in the last few months has revolved around asset sales. Pengrowth has been tirelessly marketing many of its assets for the last two years, and has closed enough sales to be able to reduce its debt to $1.1-billion as of March 31, 2017, from about $2-billion as of June 30, 2015. The remaining load still towers over the company's market cap of $502-million, of course, so Pengrowth is still marketing busily away. Lately, however, it has hit some stumbling blocks. For example, it announced in April that it would sell some of its Swan Hills assets in Alberta for $185-million. That sale was supposed to close on May 31, but did not actually close until July 6, more than a month behind schedule. That was still a better outcome than if the sale had simply collapsed, which is exactly what happened with a different Swan Hills sale. That sale, for planned proceeds of $180-million, was announced in March, was supposed to close in May and was declared dead on July 11. That same day, Pengrowth announced yet another asset sale, this time involving its Olds/Garrington assets in central Alberta for $300-million. That sale was supposed to close yesterday. With no announcements yesterday or today to confirm whether the sale did indeed close, investors are getting fidgety. They may have to wait for news until Pengrowth releases its second quarter financials on Aug. 14.
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