The deal involves Battrum area assets in Southwest Saskatchewan and Flat Lake area assets in Southeast Saskatchewan

Crescent Point Saturn Oil & Gas

Crescent Point’s non-core assets to be acquired by Saturn Oil & Gas in $438m deal. (Credit: Simon J from Pixabay)

Crescent Point Energy has agreed to divest its two oil-weighted asset packages located in southern Saskatchewan, Canada to Saturn Oil & Gas in an all-cash deal worth C$600m ($438m).

The deal involves Battrum area assets in Southwest Saskatchewan and Flat Lake area assets in Southeast Saskatchewan.

According to Crescent Point Energy, the production from both distinct asset packages is expected to be 13,500 barrels of oil equivalent per day (boe/d), which includes 95% oil and liquids, over the next 12 months.

This will generate C$210m ($153m) of net operating income at current strip commodity prices. Crescent Point Energy also allocated minimal development capital expenditures to the assets for the remaining months of this year.

Crescent Point Energy president and CEO Craig Bryksa said: “We have strategically re-built our asset portfolio over the last few years to enhance our long-term sustainability.

“This transaction allows us to realise value for these non-core assets which had limited impact on the company’s future plans while continuing to focus on our priorities of operational execution, optimising our balance sheet and increasing our return of capital.”

For Saturn Oil & Gas, the proposed transaction represents its strategy to drive accretive growth by discovering and acquiring oil-weighted assets that offer long-term development runways.

The acquisition also facilitates the proper operational size needed to access the lower-cost and more flexible debt capital secured by Saturn Oil & Gas.

Furthermore, the company’s current West Central and Southeast Saskatchewan areas, complementing the proposed assets, will accelerate significant development and operational synergies.

Saturn Oil & Gas CEO John Jeffrey said: “The Acquired Assets are a perfect fit with Saturn’s existing Saskatchewan operations and offer meaningful synergies.

“The Acquisition is highly accretive for our shareholders and consistent with our strategy of acquiring quality assets where we can apply our strategic operating approach to enhance margins, grow Adjusted EBITDA and increase Free Funds Flow.”

In Q1 2024, Crescent Point Energy completed the previously announced disposition of its Swan Hills and Turner Valley assets for C$140m ($102.3m).

Subject to customary approvals and conditions, the transaction is expected to be completed in late Q2 2024.