Cequence Energy Ltd. closed the CA$34 million sale of 50% interest in its Simonette gas compression and dehydration facility to Kanata Energy Group Ltd., the company said June 17.

Both companies will jointly fund an enhancement of the 13-11-62-27W5M facility. This includes a shallow-cut refrigeration system and sales connection to TransCanada’s NGTL system. The refrigeration plant will process 120 million cubic feet per day of liquids-rich natural gas, enough to cover Cequence’s drilling development plans for years, the company added.

Proceeds from the sale will reduce Cequence’s debts, which were CA$49 million on March 31.

The borrowing base under the senior credit facilities was set at CA$135 million. If more than CA$120 million is borrowed, lender consent is required, the company said. The facility is undrawn.

Cequence Energy Ltd., based in Calgary, Alberta, develops the Montney and Wilrich areas in the Alberta Deep Basin.