Crescent Point Exits Uinta Basin, Sells Some Saskatchewan Assets for C$912
Crescent Point Energy Corp. plans to sell its Uinta Basin asset and select southeast Saskatchewan conventional assets for total cash consideration of about C$912 million. The deal represents 27,000 boe/d of upstream assets for approximately 4.7 times cash flow.
As of press time, the buyer(s) were not disclosed.
Commenting on the sale, Craig Bryksa, president and CEO of Crescent Point said the following in a released statement: "The sale of the Uinta Basin and certain conventional assets is accretive for our shareholders and aligned with the key criteria we established for our asset portfolio. These transactions are a considerable step forward in our ongoing plan to focus our asset base."
The Uinta asset will be sold to a private operator for approximately C$700 million (US$525 million). It includes approximately 350 net sections of undeveloped land, 123.1 MMboe of proved plus probable reserves and 29.5 MMboe of proved developed producing reserves. Based on those estimates and approximately 20,000 boe/d (75 percent oil, 85 percent total liquids) of forecast production in 2020, before royalties, the deal metrics are:
- 4.8 times cash flow at current strip prices, based on an operating netback of $20.05 per boe;
- $35,000 per producing boe;
- $16.75 per 2P boe, including future development capital of $1.36 billion, as assessed by independent engineers; and
- $1,300 per acre of undeveloped land or $3,100 per acre of undeveloped land with recognized drilling locations, net of PDP reserves value of $404 million using independent reserves at current strip pricing.
The southeast Saskatchewan conventional assets that will be sold include approximately 7,000 boe/d of current production (70 percent oil, 85 percent total liquids) and 49.2 MMboe of 2P reserves. The transaction metrics are:
- 4.5 times 2020 cash flow at current strip prices, based on an operating netback of $18.55 per boe;
- $30,000 per producing boe; and
- $9.80 per 2P boe, including FDC of approximately $270 million
Including these sales, Crescent Point has now executed a total of over $1.3 billion in asset dispositions since its change in senior management and about $975 million of asset dispositions in 2019 alone. Management will continue to pursue additional asset sales, including the balance of its southeast Saskatchewan conventional assets, and the monetization of its Saskatchewan gas infrastructure assets.
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