Fairborne Energy Ltd. (FEL), the oil and natural-gas producer that has hired advisers to seek a buyer, fell the most in more than four months after agreeing sell assets in Alberta.
Fairborne, based in Calgary, dropped 9.4 percent to C$1.35 at 12:36 p.m. in Toronto, after earlier falling as much as 15 percent, the biggest intraday decline since April 23. The shares are down 54 percent this year.
Fairborne agreed to sell its Marlboro and Clive gas assets to an unidentified buyer for C$189 million ($191 million), the company said in a statement released after the close of regular trading in North America yesterday. Funds from the sale will be used to “virtually eliminate” company debt, Fairborne said.
The sale price was “slightly negative,” Ray Kwan, a Calgary-based research analyst for Macquarie Capital Markets Canada Ltd., wrote in a note to clients today. The market is “saturated” with oil and gas assets for sale, making it difficult for gas-weighted production and reserves to fetch attractive prices, Kwan said.
Fairborne said March 15 that it had begun a strategic review, including the option of selling the company. Fairborne hired FirstEnergy Capital Corp. and RBC Capital Markets as advisers the following month.
Steven VanSickle, Fairborne’s chief executive officer, didn’t immediately respond to a voicemail message seeking comment today.
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