Gear Energy Ltd. recently applied to the Alberta Energy Regulator ("AER") for permission to transfer some non-core Alberta heavy oil assets. Gear is sending this press release to provide additional clarifying details connected to the application, as the information associated to the application is publicly available. The application concerns a purchase and sale agreement between Gear and an unaffiliated third party, according to which Gear agreed to sell a number of non-core Alberta heavy oil assets to the third party. There are 450 wellbores, 84 facilities, and 19 pipelines in the noncore assets, with a total current output of about 400 boe/d.
The transfers are currently classified as “Pending” with an estimated 60 to 90 days required for review by the AER. In addition to the required AER approvals for the transfers, there are a number of other conditions for closing the sales transaction and as such there is a high degree of uncertainty as to whether the transaction will ultimately be completed. If and when the sales transaction is completed, Gear will determine whether any update or adjustment to its 2022 production or financial guidance is necessary.