Crescent Point selling Uinta Basin and southeast Sask assets for $912M
Crescent Point Energy Corp. has entered into definitive agreements with select parties to sell its Uinta Basin asset in its entirety and certain southeast Saskatchewan conventional assets for total cash consideration of approximately $912 million.
“Since we established our transition plan in September 2018, we have meaningfully improved the sustainability of our business model by revising our capital allocation process, lowering our cost structure and strengthening our balance sheet,” said Craig Bryksa, president and CEO of Crescent Point. “The sale of the Uinta Basin and certain conventional assets is accretive for our shareholders and aligned with the key criteria we established for our asset portfolio. These transactions are a considerable step forward in our ongoing plan to focus our asset base.”
Some of the key highlights of the deal are:
- Agreements to sell 27,000 boe/d of upstream assets for approximately 4.7 times cash flow.
- Net debt expected to improve to approximately $2.75 billion at year-end 2019, down from $4.40 billion prior to the changes in senior management in 2018. Transactions strengthen balance sheet and lower pro-forma net debt to adjusted funds flow ratio by approximately 0.4 times.
- Accretive to debt-adjusted funds flow per share by approximately 11 percent, while also improving the corporate operating netback by approximately five percent, lowering the capital required to sustain annual production and enhancing the Company’s financial flexibility.
- Increases Crescent Point’s ability to continue executing its share repurchase program, with approximately $100 million of incremental share repurchases budgeted for the remainder of 2019, based on guidance at current strip prices.
- Continue to advance disciplined disposition program, including the monetization of certain infrastructure assets.
During first quarter 2019, Crescent Point initiated a sales process for its Uinta Basin asset. This process has resulted in the successful execution of a purchase and sale agreement to sell the entirety of the Company’s Uinta Basin position to a private operator for total cash consideration of approximately $700 million, before closing adjustments.
Crescent Point’s Uinta Basin asset includes approximately 350 net sections of undeveloped land, 123.1 million boe of Proved Plus Probable reserves and 29.5 MMboe of Proved Developed Producing reserves.