Crescent Point Energy Corp (TSX:CPG) has announced plans to buy Spartan Delta Corp's oil and gas assets in the Montney region of Alberta for C$1.7 billion (US$1.24 billion).
Calgary-based Crescent Point said its 600 new Montney locations are adjacent to the Kaybob Duvernay assets that it bought over the past two years. The locations offer 20 years of drilling inventory and add 38,000 barrels of oil equivalent per day (boepd) of production capacity.
The company raised its production outlook to 160,000 to 166,000 boepd from an earlier forecast of 138,000 to 142,000 boepd.
Shares of Crescent Point added 0.2% and Spartan Delta stock improved more than 5% in Toronto.
The Montney region is considered one of Canada's most attractive oil plays, and Crescent Point CEO Craig Bryksa said the new wells would be profitable even if West Texas Intermediate crude prices fall below $40 per barrel.
Notably, oil prices have fluctuated since Russia invaded Ukraine in February 2022, which made it harder for potential buyers and sellers in the sector to agree on pricing. Last year, Canadian upstream deals amounted to C$15.6 billion (US$11.43 billion), which was 14% lower than the previous year, according to Sayer Energy Advisors.
The deal is expected to close in the second quarter, the company said.
Looking ahead, Crescent Point said it is looking to reduce net debt by about C$1 billion over the next 12 months and may also sell assets.
That could include assets in North Dakota's Bakken play, according to National Bank of Canada (TSX:NA) analyst Travis Wood. Crescent Point also produces oil in Saskatchewan.
Meanwhile, Spartan said it plans to focus on its remaining assets in Alberta's Deep Basin and spin out some Alberta and British Columbia assets in a new subsidiary, Logan Energy Corp.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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