Crescent Point Energy: Gunning for a Dominant Position in Canada

| About: Crescent Point (CPG)
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By Andrew Willis

The consolidation of southern Saskatchewan oil and gas fields continues to play out, with Crescent Point Energy (CPGCF.PK) paying out $249 million in stock to buy up privately owned TriAxon Resources.

Crescent Point and rivals such as PetroBakken Energy are racing to establish dominant positions in Saskatchewan, making a series of acquisitions. The latest deal from Crescent Point plays out at something of a premium, as analyst Gordon Tait at BMO Nesbitt Burns said TriAxon is being valued at $177,143 per daily barrel of oil equivalent, while Crescent Point’s valuation is 16% below this level.

BMO Nesbitt Burns is the financial adviser to Crescent Point Energy and National Bank Financial was the buyer’s strategic adviser. Investment bankers at Peters & Co. worked with TriAxon. The target company owns properties in the Bakken and Viking light oil resource plays in Saskatchewan and what's known as the Pembina Cardium play in Alberta.

Crescent Point has now made three major acquisitions in southern Saskatchewan over the past six months, and sold $805 million of equity in two financings to pay for its purchases.