The company revealed that anticipated future trends suggest a reduction in production for the North Dakota region, with an estimated decline to 18,000boe/d by 2027, which will be followed by further decreases in the succeeding years, because of the limited drilling opportunities associated with the assets
Crescent Point Energy to realise proceeds of $500m through the sale of its North Dakota assets. (Credit: rsvstks from Freeimages)
Canadian oil and gas firm Crescent Point Energy has announced the sale of its North Dakota assets in the US to an undisclosed private operator for C$675m ($500m) in an all-cash deal.
During the second quarter of 2023, the assets involved in the deal yielded a total production of around 23,500 barrels of oil equivalent per day (boe/d). Of this, 89% is oil and liquids.
According to Crescent Point Energy, the projected yearly net operating income from the assets was approximately C$375m ($276m), calculated based on a West Texas Intermediate (WTI) price of roughly $75 per barrel.
Anticipated future trends suggest a reduction in production for the North Dakota region, with an estimated decline to 18,000boe/d by 2027. This will be followed by further decreases in the succeeding years, which is attributed to the limited drilling opportunities associated with the assets, said the company.
Crescent Point Energy said that it is expediting its debt repayment by using the proceeds generated from the deal.
Its projected net debt after factoring in the deal’s effects is anticipated to be below C$2.2bn ($1.6bn). This marks a decline from the C$3bn ($2.2bn) recorded at the close of the second quarter, said the Canadian oil and gas company.
Over the last five years, Crescent Point Energy has acquired assets valued at C$3bn ($2.2bn) in the Kaybob Duvernay and Alberta Montney areas in Canada. The acquisitions were primarily financed through approximately C$2.7bn ($2bn) obtained from non-core asset sales.
The company said that the efforts have significantly improved its long-term metrics on a per-share basis, which aligns with its strategy of concentrating on high-yield assets that possess substantial inventory reserves.
Crescent Point Energy president and CEO Craig Bryksa said: “Over the last few years, we have taken several strategic steps to optimise our portfolio.
“This transaction allows us to realise future value for an area with limited scalability while immediately enhancing our financial position and increasing our focus on our core operating areas.”
The completion of the deal is expected during Q4 2023, subject to regulatory approvals and other closing conditions.
Earlier this year, Crescent Point Energy acquired certain oil and liquids-rich assets in Montney for C$1.7bn ($1.25bn).