March 27 (Reuters) - Canadian oil and natural gas producer Niko Resources Ltd said it was in advanced talks to sell some non-core assets for $157 million, nearly three weeks after receiving “significant” offers for them.
Niko shares jumped 15 percent to C$6.06 on the Toronto Stock Exchange on Wednesday, making them one of the top percentage gainers on the exchange.
The company, known for its operations in India, said it is working towards signing definitive agreements with two separate buyers by April 30.
“Niko’s balance sheet is under some pressure. They need to complete these asset sales and it looks they are making good progress toward that,” said Nathan Piper of RBC Capital Markets.
There had been concerns that the sale program was not going well, he said.
The company, which also operates in Bangladesh, Pakistan, Madagascar and Iraq, has been struggling with a series of setbacks. It abandoned wells in Indonesia and Trinidad and cut production forecast due to mechanical issues at one of its blocks in Bangladesh. It has also been dealing with declining volumes at the D6 Block off India’s east coast.
Niko did not identify the assets or the potential buyers and Chief Financial Officer Glen Valk declined to comment.
Piper said the company was most likely to sell its exploration acreage in Trinidad and Indonesia.
Niko said last year it was in talks to sell non-core assets and sign farm-out agreements that could raise $135 million in the year ended March 31.
“It is somewhat larger than the number that they promised. They promised around $135 million and this morning they talked of $157 million ... and that they are very close to completing the deal is also positive,” Piper said.
The Calgary-based company also said it was in talks with third parties regarding farm-outs and other non-core asset sales. Offers are expected in the next few weeks, it said.
Niko shares were up 9 percent at C$5.74 in late morning trading. They have lost almost half of their value in the past three months. (Reporting by Sandhya Vijayan in Bangalore; Editing by Sriraj Kalluvila)