Pengrowth Energy enters 11th hour, unable to renegotiate high debt load
Pengrowth Energy Corp. has launched a strategic review that could include the sale of the company after failing to renegotiate its high debt load amid plunging western Canadian oil prices late last year.
The Calgary-based company, which has reduced production at its key Lindbergh steam-driven heavy oil project in eastern Alberta to comply with the province’s oil curtailment program, told Canadian Press it has hired advisers to assist with the process.
Shares in Pengrowth plunged by as much as 29 per cent to 51 cents in early trading on the Toronto Stock Exchange before recovering to near their close Tuesday of 72 cents per share.
CEO Pete Sametz told Canadian Press financial markets were initially receptive to refinancing initiatives, but falling U.S. benchmark oil prices and wider discounts for Western Canadian Select crude oil made lenders “extremely cautious” in the fourth quarter.
He adds it’s hoped the recovery in oil prices so far this year will help with its refinancing and strategic initiatives.
Pengrowth reported a $503-million net loss in the last three months of 2018 mainly due to non-cash items including a $355-million deferred tax expense and a $91-million impairment on the value of its natural gas assets due to lower forward contract prices.
A year earlier, it reported a net loss of $210 million.