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Pengrowth rises on asset sale deals

NEW YORK (AP) -- Pengrowth Energy shares rose Wednesday, as the company agreed to deals that will bring to a close its $700 million asset sale program and give it enough funding for the first phase of a project.

THE SPARK: Pengrowth, an oil and natural gas producer, announced late Tuesday that it had reached an agreement to sell its interests in non-essential southeast Saskatchewan properties to a junior Canadian oil and gas company for $510 million. That asset sale is expected to close in mid-September.

Pengrowth also has closed or has letters of intent with buyers for an additional $203 million of non-core assets. Those deals have various closing dates throughout the year.

Pengrowth said in January that it planned to sell $700 million of non-essential assets.

The Canadian company expects proceeds from the asset sales to total about $1 billion this year. That includes $316 million in net proceeds from an asset sale to Weyburn in March.

Pengrowth Energy Corp. expects to use proceeds to fund ongoing capital spending, including fully funding the remaining budgeted capital expenditures related to the first phase of the Lindbergh thermal bitumen project. That project received regulatory approval on Monday.

SHARE ACTION: Up 41 cents, or 7.9 percent, to $5.65 in midday trading. The stock has traded in a range of $3.82 to $7.49 over the past year. It's up 5 percent so far this year.