Petrobank Energy and Resources Ltd (PBG.TO) said on Monday it is selling part of its stake in Petrominerales Ltd (PMG.TO) for C$101 million ($83 million) to cut debt and help fund its development of a promising Western Canadian oil play.
Petrobank said it was selling 9.9 million shares in Petrominerales, a Latin American oil producer, for C$10.25 each to a syndicate of underwriters led by TD Securities Inc and Haywood Securities Inc.
The secondary offering will cut Petrobank’s stake in Petrominerales to 66.7 percent from 76.8 percent.
It said the proceeds would bolster its finance flexibility by cutting bank debt, which could lead to additional drilling this year on the Bakken light oil play in southeastern Saskatchewan.
Petrobank announced the sale the same day that Petrominerales reported a recently drilled well in Colombia, called Corcel-D3, was producing 8,400 barrels a day of medium-gravity oil.
Its shares were up 7 Canadian cents at C$11.10 on the Toronto Stock Exchange before being halted for the offering announcement. Petrobank fell 86 Canadian cents to C$24.61.