Gulf Canada may sell its RI assets
Gulf Canada may sell its RI assets
CALGARY, Alberta (Bloomberg): Gulf Canada Resources Ltd. may
sell additional assets including its publicly traded Indonesian
unit, as it tries to pay down debt and focus on western Canada,
Chief Executive Richard Auchinleck said.
The Toronto Globe and Mail on Friday reported that the company
wanted to sell the Gulf Indonesia interest, valued at US$565.3
million at current prices, by the middle of this year.
Also on Friday, Auchinleck said the stake isn't officially for
sale, although the company would sell if approached with a good
offer.
"We're looking at selling assets, focusing on our all our
international assets, but we only if we get good value,"
Auchinleck said.
He said the company has "no sacred cows" in terms of what it
could sell.
Gulf Canada shares rose C$0.22 to C$4 in Toronto.
The Indonesian holdings are considered by analysts to be one
of the most attractive parts of Gulf Canada, which also operates
in Australia and the Netherlands.
"Indonesia is the crown jewel of the company," said John
Clarke, an analyst a Deutsche Bank Securities in Toronto.
"They've got nothing else that is going to help them in the
short term."
Gulf Indonesia's 54 percent-owned Corridor gas project, a
joint venture with Talisman Energy Inc. and Pertamina,
Indonesia's national petroleum company, just began delivering
natural gas through a newly built 340-mile pipeline to Caltex
Corp.'s Duri steamflood project on the island of Sumatra, and
could be expanded to supply gas to Singapore.
Gulf Canada sold a 24 percent stake in Gulf Indonesia to
investors in 1997 for US$19.50 a share, raising US$409.5 million.
The shares have since declined to a recent 8 7/8 in New York.
Gulf Canada, one of Canada's largest petroleum producers, has
for the past year been selling assets to whittle its debt, which
was C$2.2 billion (US$1.47 billion) at year's end. Oil prices are
near their lowest in 12 years, forcing the company to keep
divestitures as an option.
Last year the Calgary, Alberta-based company sold its
properties in the British part of the North Sea and put part of
its western Canadian natural-gas pipeline and gas processing
assets into a joint venture.
"When you've got as much debt as Gulf, you need to be looking
at all your options all the time," said Martin Molyneaux, an
analyst with FirstEnergy Capital Corp. in Calgary.