(Reuters) - Canada’s Fairborne Energy Ltd FEL.TO said it will sell its oil assets in the Greater Sinclair area in Manitoba and Saskatchewan to a private oil and gas company for C$80 million ($80.2 million) to reduce debt.
The company, which did not name the buyer, said the sale of these assets would reduce its net debt by 31 percent.
Fairborne, with operations in Alberta, Saskatchewan and Manitoba, had a debt of C$261.1 million at the end of 2011. Last year, it had sold some of its natural gas assets to repay debt.
The company’s assets in south west Manitoba and southeast Saskatchewan include proved reserves of 1.6 million barrels Of oil and accounts for about 700 barrels per day of oil production.
Weighed by debt concerns, Fairborne had said on March 15 that it was exploring strategic options, including a possible sale of the company or its assets.
Shares of Fairborne closed at C$1.84 on Friday on the Toronto Stock Exchange.
Reporting by Arnav Das Sharma in Bangalore