Repsol sells Canadian oil, gas exploration, production assets to Peyto for $468 million

(WO) – Repsol has agreed to sell its oil and gas assets in Canada to Peyto for $468 million (approximately €433 million) as part of its ongoing portfolio management to focus activity on core regions.

The agreement encompasses all the mineral rights, related facilities and infrastructure in Repsol’s Canadian upstream oil and gas business, including the assets in the Greater Edson area with a net production of 23 Mboed, of which most is gas.

The company is high-grading its upstream portfolio through rotation of assets to concentrate and consolidate production in key areas −preferentially OECD countries− with a special focus on the U.S., where Repsol has built a material position that benefits from synergies that generate greater competitive advantages.

The streamlining of the company’s portfolio has been achieved through a series of divestments in non-core countries − reducing Repsol’s E&P presence to 14 countries from 25 following the sale of assets in Vietnam, Malaysia, PNG, Australia, Greece, Morocco, Iraq, Bulgaria, Ecuador, and Russia − and focusing new development in key areas such as the U.S. and Brazil, as well as carrying out targeted acquisitions in U.S. shale and offshore plays.

Benefitting from the results of Repsol’s renowned exploration expertise, that allowed the company to make some of the most significant global discoveries of the last decade, the exploration portfolio has generated numerous opportunities that are now on track to be developed. Since 2020, Repsol has made 14 discoveries that have added significant resources, mainly in the United States and Mexico, whose development will contribute to maintain current levels of production until the end of the decade.

In line with Repsol’s strategic plan 2021-2025, the company’s upstream business is also on track to become a leader in reducing CO2 emissions in the sector, aiming to reduce its carbon intensity by 75% by 2025, from a 2016 baseline. This will be achieved through a focus on assets with less emissions per barrel while also working aggressively to improve efficiency and innovate processes using state-of-the-art technology and digital tools, as well as developing associated projects to capture and store CO2.

The value of the current asset portfolio and the company’s long-term strategy for its upstream business were crystalized through the partnership with EIG, which acquired 25% of the upstream business for $4.8 billion, thus, valuing the unit at $19 billion, exceeding analysts' consensus valuations. This agreement has enabled an advancement of the company’s net zero emissions objective through a project that accelerates transformation and reinforces the company’s multi-energy profile while reducing debt leverage and maintaining a strong cash flow to finance ambitious growth and attractive shareholder distribution.