Canada-based integrated energy company, Suncor Energy Inc. (SU), together with an affiliate, agreed to sell all of its Petro-Canada Netherlands B.V. shares to a British company Dana Petroleum plc for an estimated net cash consideration of approximately €445 million, or C$582 million including hedging gains. In U.S. dollar terms, the sale is estimated to total $546 million and represents part of Suncor Energy’s efforts to sell its non-core assets following its takeover of Petro-Canada last year.
 
Upstream oil and gas exploration and production company, Petro-CanadaNetherlands operates in the Dutch sector of the North Sea with current production of 12,000 barrels of oil equivalent per day (BOE/d) net to Suncor. Its assets include operating interests in eight offshore production and exploration licenses (and non-operating interests in 13 others). Petro-CanadaNetherlands also operates De Ruyter (54.07% working interest) and Hanze (45%) oil fields.
 
Suncor’s divestment to the British company is expected to close in the third quarter of 2010, subject to approval and closing conditions.
 
Suncor started divesting after it merged with Petro-Canada in August 2009 and set a target of shedding between $2 billion and $4 billion in non-core properties in 2010. Suncor has already sold all its oil and gas producing assets in the United States Rockies, non-core natural gas properties in Western Canada and all Trinidad and Tobago assets. Proposed divestments include certain natural gas assets in Western Canada and non-core North Sea assets.
 
For Dana, this marks the second major acquisition of Canadian-owned energy assets. Last year, the independent company acquired Calgary-based Bow Valley Energy for $240 million. The acquired company had energy assets in the North Sea.
 
Including the sale to Dana Petroleum plc announced on Monday, total proceeds of Suncor’s divestiture program hit at $2.1 billion. However, the company plans to retain operations in Syria, Libya, Eastern Canada and parts of the North Sea. We believe that Suncor will generate strong organic volume growth over the longer term through its large oil sands resource base. We remain optimistic on the company’s premiere oil sands operations, substantial conventional reserves and its strong network of retail pumps in Canada.
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