June 7, 2010 / 1:26 PM / in 8 years

UPDATE 1-Equal Energy to divest non-core assets for C$25 mln

* Says divestiture includes the Ricinus well

* Says backs 2010 production est of 9,200-9,700 boepd

June 7 (Reuters) - Equal Energy Ltd EQU.TO said it has signed a letter of intent to sell its non-core, non-operated deep sour gas interests in west central Alberta, for estimated proceeds of C$25 million, and backed its 2010 production outlook.

Equal Energy said it was currently maintaining its previous 2010 production guidance of 9,200-9,700 barrels of oil equivalent per day (boepd).

The company said first-quarter production relating to the Ricinus sour gas sale was negligible, while the assets contributed about 900 boepd to the quarter’s exit rate.

The Calgary-based company, which completed its conversion to a corporation on June 1, said the divestiture included the Ricinus well, which has been mostly shut-in since July last year, due to low gas prices.

The company successfully drilled two horizontal oil wells in the Lochend area of the Cardium trend and the first two oil wells at its Circus Viola play in Oklahoma, it said in a statement.

Equal Energy shares closed at C$7.33 Friday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Prem Udayabhanu)

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