Crescent Point Energy to sell non-core Saskatchewan assets to Saturn Oil & Gas

Crescent Point Energy Corp. has finalized an agreement to divest certain non-core oil assets in Saskatchewan to Saturn Oil & Gas Inc. for a substantial sum of C$600 million in cash. This transaction encompasses properties such as Flat Lake and Battrum, with the deal expected to close by the late second quarter of 2024.

Strategic Reorganization and Financial Enhancement

Crescent Point’s President and CEO, Craig Bryksa, highlighted the strategic rationale behind the sale: “We have strategically re-built our asset portfolio over the last few years to enhance our long-term sustainability,” he stated. Bryksa further emphasized that the transaction enables Crescent Point to “realize value for these non-core assets which had limited impact in the Company’s future plans,” while continuing to focus on operational execution and financial health.

Financial Impacts and Outlook Adjustments

The assets in question, prior to their sale, were expected to produce 13,500 barrels of oil equivalent per day (boe/d), contributing significantly to the company’s net operating income. Despite their productivity, Crescent Point had earmarked minimal capital expenditures for these assets, highlighting their peripheral role in the company’s strategic future.

Crescent Point Energy Corp. announces a C$600 million sale of non-core assets in Saskatchewan to Saturn Oil & Gas.

The transaction is part of a broader disposition strategy that saw Crescent Point also divesting its Swan Hills and Turner Valley assets earlier in the year for C$140 million. These moves are aligned with the company’s goal to streamline operations and reduce its debt burden. Post-transaction, Crescent Point anticipates its net debt to decrease to approximately C$2.8 billion by the end of 2024, a significant reduction from the C$3.7 billion recorded at the end of 2023.

Revised Production Guidance and Capital Expenditures

Following the transaction, Crescent Point has adjusted its 2024 production guidance downwards by 7,000 boe/d, setting the new range at 191,000 to 199,000 boe/d. However, the company maintains its capital expenditures forecast for 2024, projecting between C$1.4 billion and C$1.5 billion, reflecting the minimal investment allocated to the sold assets.

Advisory Roles and Transaction Details

Scotiabank, National Bank Financial Inc., TD Securities Inc., and TPH&Co., a division of Perella Weinberg Partners, served as financial advisors for the transaction, underscoring the strategic importance of this asset sale for Crescent Point.

This sale marks a significant step in Crescent Point’s strategy to optimize its asset portfolio and strengthen its balance sheet, positioning the company for enhanced operational and financial performance in the coming years.