Pengrowth Energy Trust Chief Executive Officer Jim Kinnear comments on the publicly traded trust's $248 million purchase of oil and natural-gas properties in British Columbia from Calpine Corp. (CPN:US)
Calpine agreed to sell the properties to Pengrowth to pay down debt and bolster its balance sheet. The San Jose, California- based company acquired the properties last year when it bought Encal Energy Ltd.
Progress Energy Ltd., a Calgary-based company headed by former Encal Chief Executive David Johnson, agreed to buy some of the properties from Pengrowth. Pengrowth and Progress will also jointly explore about 60,000 acres acquired from Calpine.
``We knew Dave Johnson from the industry here for a number of years. He was head of Encal for a number of years and then head of Calpine Canada before he left to start Progress. I was in touch with Dave and we'd done business with them before so we started talking about the deal.
``The effective date of the deal is July 1, that's the date on which the engineering is based. We close on about Oct. 1. It's a short closing and Calpine really wanted that. There will be a little adjustment to the purchase price, hopefully in our favor.
``We had some small interests in British Columbia before but they weren't very significant to us. This is a new area for us.
``We got some good production and exploration and development land. Progress got some production and we're sharing about 60,000 acres in the Fort St. John area.''