UPDATE 2-Paramount to sell some Deep Basin assets to Seven Generations

Wed Jul 6, 2016 5:53pm EDT
 
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* Paramount to receive C$475 mln in cash, 33.5 mln in shares

* Seven Generations to assume debt of about C$584 mln

* Paramount to own 10 pct of Seven Generations (Adds details)

July 6 (Reuters) - Canadian oil producer Paramount Resources Ltd agreed to sell some of its Deep Basin oil and gas properties in Alberta to Seven Generations Energy Ltd for about C$1.9 billion ($1.47 billion).

The divestiture is the latest example of struggling oil and gas producers selling off assets in a bid to survive the global crude price rout, which has lasted since mid-June.

The transaction will help the company fund its development of the remaining assets in Montney, Duvernay and other resources, Paramount Chief Executive Jim Riddell said in a statement.

Paramount said it would receive C$475 million in cash and 33.5 million class A common shares of Seven Generations, which will also assume the company's senior unsecured notes worth about C$584 million due 2023.

Paramount had net debt of about C$1.9 billion as of Dec. 31, according to its filing.

Upon deal closure, Paramount will own a stake of about 10 percent in the natural gas developer, making it the second-largest shareholder after the Canada Pension Plan Investment Board.   Continued...