Canadian Natural Resources sells Cold Lake pipeline stake for C$527.5 million
CALGARY (Reuters) - Canadian Natural Resources Ltd (CNQ.TO: Quote) said on Monday it will sell its stake in the Cold Lake pipeline to Inter Pipeline Ltd (IPL.TO: Quote) for C$527.5 million in cash and stock, but will maintain access to the route to move its crude.
Canadian Natural is expecting to move through the pipeline crude from its 40,000-barrel-per-day Kirby North thermal project, which it said last month would be re-initiated.
Canadian Natural (CNQ) had been the first oil sands producer to re-sanction a deferred major project since the global oil price slump began in 2014, a sign that relief is coming to the battered industry.
"While it is unusual for CNQ to sell mid-stream assets, its interest in the Cold Lake Pipeline was non-core, while egress for Kirby North has been preserved," Royal Bank of Canada (RY.TO: Quote) analyst Greg Pardy said in a note.
Canadian Natural said it will receive C$350 million in cash and 6.4 million common shares of Inter Pipeline at an ascribed value of $177.5 million for the sale of the pipeline.
"Canadian Natural expects to record an after-tax gain on disposition of approximately $200 million," the company said.
The company's shares were up 1.8 percent at C$44.78 in early afternoon trading on the Toronto Stock Exchange.
(Reporting by Bengaluru newsroom and Ethan Lou in Calgary, Alberta; Editing by Alan Crosby)
© Thomson Reuters 2017 All rights reserved.