Crescent Point Energy Lowers Production Outlook Following Divestment Of North Dakota Assets For $500M

Crescent Point Energy Corporation CPG inked a pact with a private operator to sell its North Dakota assets for $500 million in cash to accelerate its debt repayment. 

Owing to the divestment, Crescent Point lowered its 2023 annual average production guidance to a range of 156,000 to 161,000 boe/d, which represents a reduction of approximately 4,500 boe/d in comparison to the mid-point of its prior guidance range.

In the last reported quarter, these assets had gross production of approximately 23,500 boe/d (89% oil and liquids), Crescent said, without naming the buyer. 

However, a report by Reuters notes that the assets were sold to Kraken Resources, a portfolio company of alternative asset manager Kayne Anderson Capital Advisors.

Following the transaction, Crescent Point's net debt is expected to total less than C$2.2 billion by the year-end, down from C$3 billion at the end of the second quarter.

The transaction is anticipated to close in the fourth quarter of 2023.

Crescent Point lowered its development capital expenditures guidance for 2023 by approximately C$100 million, to a range of C$1.05 to C$1.15 billion, owing to the removal of capital that was expected to be spent on the North Dakota assets following the transaction's closing. 

Since 2018, the company has acquired high-quality assets in the Kaybob Duvernay and Alberta Montney. 

These transactions have enhanced Crescent Point's long-term per-share metrics and are consistent with its focus on high-return assets with significant inventory depth.

Price Action: CPG shares are trading higher by 0.88% to $8.00 premarket on the last check Friday.