CALGARY — Crescent Point Energy Corp. says it has struck a deal to buy Alberta oil and gas producing assets from the Canadian arm of Royal Dutch Shell for $900 million.
The Calgary-based producer says it will pay $700 million in cash and issue 50 million shares in return for the Duvernay light oil shale assets in the western part of the province.
Shell, which sold most of its oilsands assets in Alberta to Calgary-based Canadian Natural Resources Ltd. in 2017, says the deal announced after markets closed will allow it to focus on core producing assets such as the Permian Basin of Texas and New Mexico.
The companies say Shell’s Duvernay assets are currently producing around 30,000 barrels of oil equivalent per day from more than 270 wells.
Saskatchewan-focused Crescent Point says the deal allows it to enter a “premier and established” liquids-rich play which will boost its 2021 production estimate to about 134,000 boe/d, mainly highly profitable crude oil and petroleum liquids.
It says Shell will own about 8.6 per cent of Crescent Point common shares when the deal closes.
“Divesting these assets underpins Shell’s effort to focus the upstream portfolio to deliver cash,” said Shell upstream director Wael Sawan in a news release.
“While we believe these assets hold value, the divestment allows us to focus on our core upstream positions like the Permian Basin, with integrated value chains, thereby building a resilient, lower-risk and less complex portfolio.”
This report by The Canadian Press was first published Feb. 17, 2021.
Companies in this story: (TSX:CPG)
The Canadian Press