Crescent Point Energy has acquired Saskatchewan Viking oil assets from Polar Star Canadian Oil and Gas, a private western Canadian oil and gas producer. The purchase price comprised of approximately 7.6 million Crescent Point shares and C$2 million cash, or approximately C$334 million (US$308 million), based on the five-day weighted average price of Crescent Point shares prior to the execution the agreement in mid-May-2014 of C$43.88 per Crescent Point share.
· Located in the Viking play at Dodsland, Saskatchewan
· Production of more than 2.8 MBOE/d
· Approximately 40 net sections of Viking land in the Dodsland area of southwest Saskatchewan
· 258 net internally identified Viking drilling locations
· Approximately 8.7 MMBOE of 1P reserves and 13 MMBOE of 2P reserves
· Reserve life index of 8.5 years for 1P reserves and 12.7 years for 2P reserves
· Average production metric of C$119,300/BOE
· Average 1P reserves metric of C$38.39/BOE
· Average 2P reserves metric of C$25.69/BOE
Crescent Point also revised its 2014 guidance for production. The company's average daily production in 2014 is expected to increase marginally to 135.5 MBOE/d from 134 MBOE/d and its 2014 exit production rate is expected to increase 2% to 148 MBOE/d.
Crescent Point President and CEO Scott Saxberg commented: "The Saskatchewan Viking play has very high netbacks of more than C$85 per barrel. We expect these assets to provide free cash flow that will help us reduce our 2015 all-in payout ratio by another 2%."
Earlier in Apr-2014, Crescent Point acquired oil-focussed CanEra Energy, a portfolio company of Riverstone Holdings and Natural Gas Partners, for approximately $1.01 billion. The acquired assets are located in south-east Saskatchewan. The company paid $73,000/Daily BOE for production and $1,362/Acre for Undeveloped Acreage (adjusted for the value of tax pools).
Since Jan-2013, Viking play has seen 13 M&A transactions with a cumulative value of just over a billion.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.