Penn West Petroleum Ltd. shares surged nearly 50 per cent after the oil producer agreed to sell one of its main producing areas to ease a crushing debt burden.

Penn West said late Friday it will sell its Viking Dodsland property in Saskatchewan   to privately held Teine Energy Ltd. for $975-million. It will jettison production of nearly 14,000 barrels a day.

It struck another deal to sell Alberta assets for $140-million.

The shares jumped 53 cents to $1.69 on the Toronto Stock Exchange early in Monday’s session.

Penn West said it expects to sell additional assets pumping 20,000 barrels a day of output before the end of the year. Once the deals are done, its main assets will be in the Pembina Cardium region of Alberta.

The Viking transaction is a drastic move, but necessary, said Jeremy McCrea, analsyt at Raymond James. With the deal, the company’s debt-to-cash-flow ratio will fall to 3.9 times in 2017 from 13 times at the end 2015, he said.

“The sale is a definitive step which will help to change the narrative from constant discussions around its debt towards constructive conversations around [Penn West’s] recent performance its remaining Cardium area,” Mr. McCrea wrote in a note to clients.

He revised his rating to “outperform” from underperform” and lifted his 12-month target price to $3 from 75 cents.

Barclays said it believes the transaction was driven by debt-holders, as the company was approaching a breach of its covenants. The company will now be able to remain on side with its debt terms through the end of the year, the bank said.

Barclays analyst Grant Hofer increased his target to $1.50 from $1.

With the debt burden lessened, the market focus on the company will now shift to its ability to operate effectively in its remaining operations, “and on this front the market is likely to take a wait-and-see approach,” he said in a research note.