Perpetual Energy Inc. has closed the previously announced sale of its Elmworth property for net proceeds to Perpetual of $77.5 million, subject to certain closing adjustments and transaction costs.

The Elmworth property consists of 3 gross (1.5 net) non-producing horizontal Montney gas wells at Elmworth, one vertical well at Wapiti, and undeveloped land, including 20,256 net acres of Montney rights. At year-end 2012, McDaniel estimated total proved and probable reserves of 13.1 MMboe net to Perpetual at Elmworth.

Furthermore, McDaniel estimated $122.8 million of future development capital (FDC) would be required to convert these undeveloped reserves to producing reserves. There is currently no production or funds flow from operations at the Elmworth property.

This disposition will have no negative effect on Perpetual's 2013 projected production or funds flow, and interest expense will be reduced by approximately $4.0 million on an annual basis, assuming that the proceeds are used to permanently reduce bank debt.

Tags: Perpetual Energy Inc.