Veren Inc. completes C$600m sale of non-core Saskatchewan assets
Veren Inc. (formerly known as Crescent Point Energy Corp.), listed on both TSX and NYSE under the ticker VRN, has finalized the sale of certain non-core assets in Saskatchewan to Saturn Oil & Gas Inc. for a total of CAD 600 million (approximately $ 540 million, including closing adjustments). This strategic move is part of Veren Inc.’s broader initiative to streamline operations and strengthen its financial standing.
The transaction’s net proceeds are earmarked for significant debt reduction, aiming to fortify the company’s balance sheet. Veren Inc. projects its net debt to total around $ 2.8 billion by the end of 2024. This forecast is predicated on average commodity prices of USD 75 per barrel of West Texas Intermediate (WTI) crude oil and $ 2.10 per Mcf of AECO natural gas for the year.
The disposed properties, including the Flat Lake and Battrum areas in Saskatchewan, were slated to produce an estimated 13,500 barrels of oil equivalent per day (boe/d), with a heavy emphasis on oil and liquids, representing about 95% of total production. Over the next 12 months, these assets were expected to generate around $ 210 million in net operating income, based on current commodity price projections. Notably, Veren had allocated minimal development capital to these assets for the remainder of 2024.
This sale follows closely on the heels of another disposition completed in the first quarter of 2024, where Veren divested its Swan Hills and Turner Valley assets for USD 140 million. Those assets carried with them undiscounted asset retirement obligations (ARO) valued at USD 180 million. The cumulative effect of these sales is a marked reduction in Veren’s net debt, from $ 3.7 billion at the end of 2023 to an expected $ 2.8 billion by year-end 2024, representing a leverage ratio of approximately 1.1 times adjusted funds flow.
Looking forward, Veren Inc. remains committed to enhancing operational efficiency and financial health. The company plans to continue optimizing its asset portfolio, reducing debt, and increasing returns to shareholders as key components of its strategic priorities.
The completion of these asset sales represents a pivotal step for Veren Inc. in its ongoing strategy to streamline its operations and improve its financial resilience. By divesting non-core assets and reducing debt, Veren is better positioned to capitalize on its core operations and deliver enhanced value to its shareholders.