With the divestments, the company is also revising its 2024 annual average production guidance down by 7,000 boe/d to a range between 191,000 boe/d to 199,000 boe/d. (Source: Shutterstock)
Crescent Point Energy Corp. is selling non-core assets in Saskatchewan, Canada, including Flat Lake and Battrum, for CA$600 million (US$437.17 million) to Saturn Oil & Gas Inc.
Calgary, Alberta-based Crescent Point Energy has been busy in the past few years rebuilding its asset portfolio in the interest of long-term sustainability, Craig Bryksa, president and CEO of Crescent Point, said in the transaction’s May 6 announcement.
"This transaction allows us to realize value for these non-core assets which had limited impact in the company's future plans while continuing to focus on our priorities of operational execution, optimizing our balance sheet and increasing our return of capital," Bryksa said.
In first quarter 2024, Crescent Point also divested its non-core Swan Hills and Turner Valley assets for CA$140 million (US$102.02 million). They had associated undiscounted asset retirement obligations of CA$180 million (US$131.16 million).
Proceeds from the divestments are being used to repay debt, which was CA$3.7 billion (US$2.7 billion) at the end of 2023. By the end of 2024, Crescent Point’s pro-forma net debt is expected to total CA$2.8 billion (US$2.04 billion).
With the divestments, the company is also revising its 2024 annual average production guidance down by 7,000 boe/d to a range between 191,000 boe/d to 199,000 boe/d.
Over the next 12 months, production from the assets is expected to hit 13,500 boe/d (95% oil and liquids). Net operating income generated is expected to be CA$210 million (US$153.03 million) at current strip commodity prices.
Scotiabank is acting as financial adviser and National Bank Financial Inc. is acting as strategic adviser to Crescent Point for the sale of its Flat Lake asset in southeast Saskatchewan. TD Securities Inc. and TPH&Co. are acting as financial advisers to Crescent Point for the sale of its Battrum asset in southwest Saskatchewan.
The transaction is expected to close in second-quarter 2024, subject to customary closing conditions.
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