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.