Calgary-based Crescent Point Energy has announced it will buy sustainability-focused Spartan Delta Corp’s oil and gas assets for $1.24 billion in cash.
Spartan’s 600 locations in Alberta’s Montney region, which are adjacent to Crescent’s Kaybob Duvernay assets, will enhance production capacity by 38k barrels of oil equivalent per day. Crescent Point concentrates on light oil production in southern Saskatchewan and central Alberta.
The Montney region is desirable because of its robust economics. "If you think of the under-investment that has occurred globally within our sector (on production) over the last five to seven years, you can paint yourself a pretty bullish picture on oil," Crescent Point’s Chief Executive Officer Craig Bryksa told Reuters.
He added that the new wells would be profitable even if the benchmark West Texas Intermediate crude prices fall below $40 per barrel.
The company plans to reduce net debt by $1.36 billion over the next year and is considering selling assets, potentially in North Dakota's Bakken, according to Reuters.
Crescent Point raised its production outlook to 160k to 166k BOEPD from the earlier forecast of 138k to 142k BOEPD.
The deal is expected to close during the second quarter.