Crescent Point Energy Corp, based in Canada, announced on Tuesday that they will be purchasing Spartan Delta Corp’s oil and gas shares in Alberta’s Montney area for a sum of C$1.7 billion in cash.
Since Russia’s invasion of Ukraine more than a year ago, oil prices have been extremely unpredictable, making it impossible for buyers and sellers to reach a reasonable price. Sayer Energy Advisors reports that in 2022, Canadian upstream deals totalled C$15.6 billion, a decrease of 14% from the previous year.
Shares of Crescent Point rose slightly by 0.1% on the Toronto Stock Exchange, while Spartan’s stock experienced a much bigger jump of 6%.
Crescent Point, an energy company based in Calgary, Alberta, recently announced that they have added 600 new Montney locations to their Kaybob Duvernay assets, which they have acquired over the past two years. This new addition will provide them with 20 years of drilling inventory, as well as a production capacity of 38,000 barrels of oil equivalent per day (boepd).
Crescent Point CEO Craig Bryksa has stated that the company’s new wells will be profitable even if benchmark West Texas Intermediate crude prices CLc1> drop below $40 per barrel, making the Montney one of Canada’s most appealing oil fields.
“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,” said Bryksa.
Over the next year, Crescent Point plans to sell assets and lower its net debt by around C$1 billion.
He stated that the company’s Bakken play assets in North Dakota might no longer be a good fit. According to Bryksa, Crescent Point has not started marketing any particular assets or established a goal for the total value of asset sales.