(Bloomberg) – Crescent Point Energy Corp. is accelerating its shift into Alberta’s shale plays with a C$1.7 billion ($1.3 billion) acquisition of Spartan Delta Corp.’s assets in the prolific Montney formation.
The purchase will add 600 drilling locations and 38,000 boe of production, Calgary-based Crescent Point said Tuesday. The cash acquisition — which will be financed through Crescent Point’s existing credit facilities — immediately adds to key per-share cash flow metrics, the company said.
Crescent Point, an oil driller that was heavily focused on Saskatchewan, has been expanding into western Alberta’s shale plays amid rising demand for natural gas and light oil. The acquisition adds to the Kaybob Duvernay shale positions in western Alberta that Crescent Point bought from Shell Plc two years ago.
The Montney is major natural gas and light oil formation that straddles the Alberta-British Columbia border and accounts for about half of Canada’s natural gas output. Crescent Point’s Montney and Duvernay positions are adjacent to each other, which the company says will help operating efficiency.
Crescent Point shares rose 0.7% to C$9.13 at 1:16 p.m. in Toronto, and Spartan Delta gained 6.2% to C$14.65. Crescent Point is down 5.5% this year, in line with the 5.4% decline for the S&P/TSX Energy Index.
Spartan Delta has been an active driller in Alberta, completing 52 wells last year, including 12 in the Bezanson field and 11 in the Elmorth field near Grand Prairie. Earlier this month, a land company paid C$16,727 per hectare for parcels of drilling rights near Grand Prairie in an area where Spartan Delta had a major presence. The amount was the highest paid in eight years on a per-hectare basis.
