UPDATE 2-Canadian Natural to sell royalty assets to PrairieSky for C$1.8 bln

(Adds details, background)
Nov 9 (Reuters) - Canadian Natural Resources Ltd CNQ.TO
will sell most of its royalty assets to PrairieSky Royalty Ltd
PSK.TO in a C$1.8 billion ($1.4 billion) deal, joining other
oil producers in shedding assets to weather a slump in crude
prices.
The deal comes just a week after Canadian Natural Chief
Executive Steve Laut said the company would not rush to conclude
a royalty deal this year. urn:newsml:reuters.com:*:nL3N1303S1
Cenovus Energy Inc CVE.TO and Encana Corp ECA.TO , which
spun off its royalty assets into PrairieSky last year, are the
other major Canadian oil and gas producers that have shed assets
in the past year to cut debt and raise funds for projects.
Canadian Natural said on Monday PrairieSky would pay C$680
million in cash and about 44.4 million PrairieSky shares for
about 81 percent of its royalty volumes. urn:newsml:reuters.com:*:nMKWqWmZya
Canadian Natural's shares closed at C$33.66 on the Toronto
Stock Exchange on Friday, while PrairieSky shares ended at C$26.
Canadian Natural said it would use the cash proceeds to
lower its debt-to-book value to about 36 percent from about 38
percent and increase its credit line to C$4.1 billion from C$3.4
billion.
The company, Canada's No.2 oil and gas producer, said it
planned to distribute a majority of the shares that are a part
of the deal around its annual shareholder meeting in May.
Cenovus agreed in June to sell its royalty lands to Ontario
Teachers' Pension Plan for C$3.3 billion.
Reuters reported last month that Canadian Natural was in
talks with the Canada Pension Plan Investment Board, Ontario
Teachers' and PrairieSky to offload its royalty assets.
urn:newsml:reuters.com:*:nL1N12U2ML
The deal, which involves assets spanning about 5.4 million
acres in Western Canada and representing about 6,700 barrels of
oil equivalent per day, is expected to close this year.
Last week, Canadian Natural announced another cut to its
capital expenditure budget for 2015. The latest cut brings down
the company's capital spending plan for next year to C$5.44
billion from about C$8.6 billion planned initially.
($1 = C$1.33)