June 4, 2010 / 11:03 AM / 7 years ago

UPDATE 1-Galleon Energy to sell unit for C$135 mln

* Says unit holds a portion of its property in Alberta

* To use proceeds to cut bank debt

* Deal expected to close by June end

June 4 (Reuters) - Galleon Energy Inc GO.TO said it agreed to sell its unit that holds a portion of its Puskwa property in Alberta to a public company for about C$135 million in cash, and would use the net proceeds to reduce its bank debt.

Galleon Energy did not name the public company that is buying its unit.

In March, Galleon Energy said it was reviewing strategic alternatives, including the sale of the company, as it continued to suffer from weak natural gas prices. [ID:nSGE62A0EY]

The company said the properties being sold currently produce 1.4 million cubic feet and 1,370 barrels of oil per day and natural gas liquids of 1,600 barrels of oil equivalent per day (boe/d).

After the deal closes, the company expects to have production of about 14,500 boe/d and net debt of about C$120 million.

The deal is expected to close by June end.

Shares of the Calgary, Alberta-based company closed at C$5.75 Thursday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Anne Pallivathuckal) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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