Crescent Point Energy is scooping up fellow Canadian producer Hammerhead Energy in a cash-and-stock deal.
The transaction is valued at US$1.86 billion (CA$2.55 billion), including the assumption of approximately US$332 million (CA$455 million) of Hammerhead’s net debt, the companies announced after markets closed on Nov. 6.
The deal extends Alberta-based Crescent Point’s development runway in the Montney Shale with approximately 800 incremental drilling locations. At Crescent Point’s current pace, its premium inventory will grow to more than 20 years through the Hammerhead acquisition.
“This strategic consolidation is an integral part of our overall portfolio transformation,” said Craig Bryksa, president and CEO at Crescent Point. “The acquired assets, which are situated in the volatile oil window in the Alberta Montney and adjacent to our existing lands, provide significant value with premium drilling inventory, infrastructure ownership and scalable market access.”
After closing, Crescent Point will focus on development in the Montney and Kaybob Duvernay plays, while maintaining complementary, long-cycle assets in Saskatchewan.
The deal is expected to create the seventh-largest Canadian E&P by production volume. Crescent Point also expects to be the largest land owner in the Alberta Montney’s volatile oil window with the Hammerhead acquisition.
Crescent Point anticipates that the deal will be immediately accretive to its per share metrics and boost shareholder returns.
The company plans to increase its base dividend by 15% to $0.46/share on an annual basis after closing.
This summer, Crescent Point announced selling its North Dakota assets to a private operator for US$500 million (approximately CA$675 million) in cash.
Recommended Reading
OFS Sector Loses Jobs, but Trade Org Says Growth Potential Remains
2024-05-08 - According to analysis by the Energy Workforce & Technology Council, the OFS job market may still have potential for growth despite a slight decrease in the sector in April.
Exxon Appoints Maria Jelescu Dreyfus to Board
2024-05-08 - Dreyfus is CEO and founder of Ardinall Investment Management, a sustainable investment firm, and currently serves on the board of Cadiz Inc. and Canada-based pension fund CDPQ.
E&P BW Energy Undergoes ‘Technical’ Ownership Restructuring
2024-05-08 - The restructuring will not involve any change to the ultimate control of BW Energy as the shares currently held by BW Group will be sold to BW Energy Holdings.
Hess Midstream Subsidiary Plans Private Offering of Senior Notes
2024-05-08 - The proposed issuance is not expected to have a meaningful impact on Hess Midstream’s leverage and credit profile, according to Fitch Ratings.
Wood Mackenzie Appoints Jason Liu as CEO
2024-05-07 - Liu replaces former CEO Mark Brinin, who is departing to pursue other opportunities, Wood Mackenzie said.