NSRL Sale Clears First Hurdle

Nova Scotia Resources Ltd. announced today that a deal to sell the Crown-owned company’s assets in the Sable project has cleared the first of a number of hurdles required before the sale can be completed.

Shell and ExxonMobil had the opportunity to exercise a right of first refusal on any sale of the Sable project assets. NSRL chair Steve Parker said the two companies have independently informed NSRL they have declined to match the $355 million asset portion of the deal signed by Emera and its partner Pengrowth last month.

"This means one hurdle has been overcome, but the deal still has some distance to go before it’s complete," said Mr. Parker. The next requirement is for Emera to obtain permission to join the Sable inner group as a natural gas production partner.

"There are significant approvals required before we can proceed to close this deal," said Mr. Parker. “We are now waiting to see if Emera is successful in completing the next step of this process. If they are unable to complete this part of the agreement, the province has the right to terminate the sale process, and either keep the company or start the sale process over again."

The deal for the sale of NSRL was signed on Feb. 6. The agreement is with Emera Inc., Pengrowth Energy Trust and PanCanadian Petroleum Ltd.

Emera and Pengrowth would pay $355 million for NSRL’s share of Sable Offshore Energy Inc. (SOEI) assets, while PanCanadian would pay $65 million for the shares of the company to obtain the balance of NSRL’s non-SOEI assets. The total purchase price would be $420 million for the assets and shares of NSRL and its affiliates. The sale does not include the two per cent gross overriding royalty in the proposed Deep Panuke project.