CPG:CC - Crescent Point Energy to buy Spartan's Montney assets in $1.7B deal

2023-03-28 07:18:49 ET

Crescent Point Energy ( NYSE: CPG ) said Tuesday it agreed to acquire Spartan Delta Corp.'s oil and liquids-rich Montney shale assets in Alberta for $1.7B in cash.

The deal will add 38K boe/day (55% oil and liquids) with attractive netbacks generating significant excess cash flow, and total drilling inventory of 600 net Montney locations, providing more than 20 years of inventory to sustain current production levels.

Crescent Point ( CPG ) expects the acquisition will be immediately accretive on all per share metrics; in the 12 months following the deal closing, adjusted funds flow and excess cash flow per share are expected to rise by ~20%.

The company said it will continue to return 50% of its discretionary excess cash flow to its shareholders in addition to its base dividend, or ~60% of its excess cash flow.

Crescent Point ( CPG ) revised its FY 2023 guidance to include the impact of the acquisition, including annual average production of 160K-166K boe/day and development capital spending of $1.15B-$1.25B.

Crescent Point Energy's ( CPG ) "share buybacks look set to run rampant and thus remove upwards of 40%-plus of their outstanding shares," DT Analysis writes in a report posted recently on Seeking Aloha .

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