Crescent Point Sheds $684mn in Assets

Toronto-listed Crescent Point Energy announced on September 3 it would withdraw from the Uinta basin in the US state of Utah and trim its operations in Canada’s Saskatchewan province through a series of sales deals worth C$912mn ($684.4mn), in order to streamline its business.

The company is selling its entire portfolio in the unconventional Uinta basin to an unidentified private operator for C$700mn ($525mn), it said in statement. These assets include 123.1mn boe of proven and probable (2P) liquid and gas reserves and 29.5mn boe of proved developed and producing resources. They are expected to flow 20,000 boe/day in 2020.

“Crescent Point expects to generate improved corporate returns and a stronger operating netback from lower royalties and reduced expenses as a result of this disposition,” it explained. “The capital expenditures required to sustain the company’s annual production are also expected to improve due to a shallowing of the corporate decline rate.”

The sale is due for completion in October.

Crescent Point is also offloading assets with 49.2mn boe in 2P reserves currently flowing 7,000 boe/day in southeast Saskatchewan, also to unnamed buyers. It noted these conventional assets incurred higher operating costs, generating a netback 30% below its average. These deals are set for closure in the third quarter.

“Additionally, the future decommissioning liabilities associated with these non-core assets are higher than those associated with the company’s key focus areas,” it said.

The company announced it would make sweeping changes to its business model last year, to improve its margins and scrub C$1bn from its debt pile by the end of 2019. Besides divestments, it has also reduced its workforce and hired a new CEO, Craig Bryska. Once all the latest sales are closed, Crescent  oint will have disposed of $1.3bn of assets, including $975mn in 2019 alone.